South Korea's producer prices declined for the second consecutive month in May as a fall in the prices of industrial goods led the overall decline, offsetting a gain in the prices of agricultural products and utilities, central bank data showed Wednesday.

The producer price index, a major barometer of consumer inflation, fell 0.3 percent in May from a month earlier, following a 0.1 percent on-month dip in April, according to the data from the Bank of Korea.

From a year earlier, the index rose 0.6 percent in May slowing from a 1.6 percent on-year advance a month earlier.

The on-month fall is attributed to a 0.8 percent slide in the prices of industrial goods, although prices of agricultural goods and utilities climbed 1.5 percent and 0.6 percent each.

Producer prices are one of the key indicators that determine the trajectory of inflation, as they influence the prices that businesses will charge to consumers in the months ahead.

Consumer prices, a key gauge of inflation, rose 3.3 percent in May from a year earlier, slowing from a 3.7 percent on-year rise in April. The latest reading marked the lowest level since 3.2 percent in October 2021.

South Korea's inflation has been on a downward trend with some ups and downs after reaching a peak of 6.3 percent in July last year.

But the latest figure is still above the central bank's medium term target of 2 percent. (Yonhap)