South Korea’s producer price index, which serves as a yardstick for inflation, slipped 0.7 percent on-month in April, extending its decline for the third consecutive month, data from the central bank showed Thursday.

The index, which reflects how domestic producers receive price changes regarding their outputs, came to 102.08 last month, which fell from the corresponding and revised figure of 102.82 in March. The figure slipped 1.5 percent on-year.

The Bank of Korea said that the index was weighed on by a tumble in oil prices, which dropped to historic lows in April. Scarce storage capacity coupled with an oversupply of oil due to COVID-19 led to the dramatic plunge last month.

Though the prices have been still depressed this month, it has also been showing signs of recovery, West Texas Intermediate futures data recently showed.

The price index for coal and petroleum products shed 22.6 percent on-month and 43.5 percent on-year. Both percentages marked the steepest drop in the index since the BOK started compiling the data in January 1965. Overall, the index for manufactured goods shed 1.5 percent on-month to 98.37 in the cited period.

The index for farmed goods, including fisheries and meat increased by 0.2 percent on-month with people apparently refraining from dining out during the latest pandemic.

The index for services shed 0.2 percent from the previous month, but services in the finance sector, including insurers, gained 0.3 percent, in the cited period. Transit services also gained 0.2 percent in the same period.

By Jung Min-kyung (mkjung@heraldcorp.com)