South Korea Dec import prices drop at sharpest pace since Oct 2009

[SEOUL] South Korea's import prices plunged in December at the sharpest pace since October 2009, continuing their longest consecutive fall as global oil prices slide, central bank data showed on Tuesday.

Import prices in won terms dropped 13.0 per cent in December from a year earlier, the Bank of Korea said. In November, import prices fell a revised 8.0 per cent on year.

The sub-indices showed prices of coal and oil products plunged 37.8 per cent in December from a year ago in their fastest drop since May 2009, central bank records showed.

A Bank of Korea official said import and export prices are expected to keep in line with oil prices, as they are closely linked. According to the central bank, oil prices fell 21.9 per cent in December in annual terms.

The biggest oil drop on record came in November 2008, when prices fell 26.2 per cent on-year.

Although some experts have expressed concern falling oil prices may tip South Korea into deflation, policymakers have been optimistic about the effect these will have on the economy this year.

Export prices, also in won terms, fell 4.3 per cent last month from a year before and at a slightly sharper pace than a revised 2.2 per cent decline in November, the central bank said.

REUTERS