South Korea March 2025 PPI +1.3% y/y (prior +1.5%)

South Korean March 2025 PPI

+1.3% y/y

• prior +1.5%

0.0% m/m

• prior 0.0% also

***

Unlike the Consumer Price Index (CPI), which measures the price change that consumers see for a basket of goods and services, the PPI focuses on the change in the prices of goods sold by companies.

The PPI reflects some of cost pressures faced by producers

• its based on a basket of goods that represents the range of products produced within the economy, including items such as:
  • raw materials like metals and chemicals
  • semi-finished goods
  • and finished products
  • different weights are assigned to each category within the index based on its contribution to the overall economy.
• it does not account for the quality improvements in goods and services over time, which might lead to overestimation of inflation
  • additionally, it reflects only the prices of domestically produced goods, leaving out the impact of imported goods

The PPI can be used as a guide to inflationary pressures in the economy:

• If producers are facing higher costs, they may pass these on to consumers, leading to higher consumer prices.

This article was written by Eamonn Sheridan at www.forexlive.com.