South Korea producer inflation hits 16-month low in Oct

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An office worker eats his lunch at a convenience store in Seoul

SEOUL (Reuters) – South Korea’s annual producer inflation slowed for a fourth straight month in October to a 16-month low, central bank data showed on Thursday.

The producer price index stood 7.3% higher in October than the same month a year ago, according to the Bank of Korea (BoK), after a revised 7.9% rise in September.

The rise was the slowest since June 2021. Producer inflation had hit a near 14-year high of 10.0% in June.

On a monthly basis, however, the index rose 0.5%, picking up from a revised 0.1% in September and the fastest in four months.

The monthly rise was led by utility prices for electricity, gas, water supply and waste, which jumped 8.1%.

South Korea’s central bank is expected to scale back its tightening pace later on Thursday and hike rates by a modest 25 basis points amid signs of slowing domestic growth, despite high inflation and an aggressive U.S. Federal Reserve, a Reuters poll found.

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(Reporting by Jihoon Lee; Editing by Kim Coghill)