South Korea’s Producer Price Index YoY: November 2025 Analysis and Macro Outlook
The November 2025 Producer Price Index (PPI) for South Korea rose to 1.50% YoY, surpassing estimates of 1.30% and marking a notable acceleration from October’s 1.20%. This rebound follows a mid-year lull near 0.30%, signaling renewed inflationary pressures in upstream sectors. The data suggests potential implications for monetary policy tightening and export competitiveness amid ongoing geopolitical tensions and global supply chain shifts.
Table of Contents
The latest Producer Price Index (PPI) YoY for South Korea, released on November 20, 2025, registered a 1.50% increase. This figure outpaced the market consensus of 1.30% and improved from October’s 1.20%, according to the Sigmanomics database. The PPI measures the average change over time in the selling prices received by domestic producers for their output, serving as a leading indicator of consumer inflation trends.
Drivers this month
- Energy prices contributed approximately 0.40 percentage points to the increase, reflecting global oil price rebounds.
- Intermediate goods prices rose by 0.60 percentage points, driven by semiconductor and chemical sectors.
- Food processing prices remained stable, contributing minimally to the overall index.
Policy pulse
The 1.50% PPI YoY reading sits above the Bank of Korea’s inflation target range of 2%, but signals upstream inflation pressures that could feed into consumer prices. This may reinforce the central bank’s cautious stance on further rate hikes, especially given recent economic growth moderation.
Market lens
Immediate reaction: The KRW/USD exchange rate strengthened by 0.30% within the first hour post-release, reflecting investor confidence in South Korea’s inflation management. The 2-year government bond yield rose by 5 basis points, pricing in potential monetary tightening.
Examining the PPI in the context of other core macroeconomic indicators provides a fuller picture of South Korea’s economic health. The 1.50% YoY rise contrasts with the Consumer Price Index (CPI) YoY, which held steady at 2.10% in October, indicating some lag between producer and consumer inflation.
Monetary Policy & Financial Conditions
The Bank of Korea has maintained its benchmark interest rate at 3.50% since September 2025, balancing inflation control with growth concerns. The upward PPI trend may prompt the central bank to consider incremental hikes if inflationary pressures persist. Financial conditions remain moderately tight, with credit growth slowing to 4.20% YoY in Q3 2025.
Fiscal Policy & Government Budget
South Korea’s fiscal stance remains expansionary, with a 2025 budget deficit projected at 2.80% of GDP. Government spending on infrastructure and technology sectors supports domestic demand, which could sustain producer price pressures. However, fiscal prudence is expected to tighten in 2026 to contain debt levels.
External Shocks & Geopolitical Risks
Ongoing geopolitical tensions in Northeast Asia and supply chain disruptions from China’s intermittent lockdowns continue to affect input costs. The recent rise in global commodity prices, especially oil and metals, has fed into South Korea’s PPI, underscoring vulnerability to external shocks.
This chart reveals a clear upward trajectory in South Korea’s PPI since mid-2025, signaling mounting cost pressures for producers. The reversal from the summer low suggests inflation risks are reemerging, which could translate into higher consumer prices and influence monetary policy decisions.
Market lens
Immediate reaction: KRW/USD appreciated 0.30%, while 2-year yields climbed 5 basis points, reflecting market anticipation of tighter monetary policy. Equity indices showed mild volatility but no sustained sell-off.
Looking ahead, the trajectory of South Korea’s PPI will hinge on several factors, including global commodity prices, domestic demand, and geopolitical developments. The following scenarios outline potential paths:
Bullish Scenario (30% probability)
- Global commodity prices stabilize or decline, easing input costs.
- Supply chain normalizes, reducing inflationary pressures.
- Monetary policy remains accommodative, supporting growth.
- PPI growth moderates to 1.00%–1.20% YoY by mid-2026.
Base Scenario (50% probability)
- Commodity prices remain elevated but volatile.
- Moderate supply chain disruptions persist.
- Gradual monetary tightening continues.
- PPI stabilizes around 1.50%–1.70% YoY through 2026.
Bearish Scenario (20% probability)
- Commodity prices surge due to geopolitical shocks.
- Supply chain issues worsen, pushing costs higher.
- Monetary policy tightens aggressively, risking growth.
- PPI accelerates above 2.00% YoY, fueling broader inflation.
Policy pulse
Given the upward PPI trend, the Bank of Korea may lean toward cautious rate hikes in early 2026 to anchor inflation expectations. However, growth concerns and external risks will likely temper aggressive tightening.
South Korea’s November 2025 PPI YoY reading of 1.50% signals a resurgence of inflationary pressures after a mid-year lull. This development underscores the delicate balance faced by policymakers amid external shocks and domestic demand fluctuations. While the data points to moderate upstream inflation, the central bank’s measured approach will be critical to sustaining economic growth without letting inflation spiral.
Structural trends such as technological advancement and supply chain diversification may help mitigate long-run inflation risks. However, vigilance is warranted as geopolitical tensions and commodity price volatility remain key uncertainties.
Key Markets Likely to React to Producer Price Index YoY
The Producer Price Index YoY is a vital gauge for markets sensitive to inflation and economic momentum. Key instruments historically tracking this indicator include South Korean equities, the KRW currency pair, and commodity-linked assets. Their price movements often reflect shifts in inflation expectations and monetary policy outlooks.
- KOSPI – South Korea’s benchmark stock index, sensitive to inflation and growth signals.
- KRWUSD – The Korean won against the US dollar, reflecting currency strength amid inflation data.
- SK – A major conglomerate with exposure to industrial inputs affected by PPI changes.
- BTCUSD – Bitcoin, often viewed as an inflation hedge, reacts to inflation data globally.
- USDKRW – The inverse currency pair, showing volatility around inflation prints.
Extras: PPI vs. KOSPI Since 2020
Insight: Since 2020, South Korea’s PPI YoY and the KOSPI index have shown a moderate positive correlation of approximately 0.45. Periods of rising PPI often coincide with equity market gains driven by stronger corporate earnings and economic recovery. However, sharp PPI spikes tend to precede market corrections due to inflation fears and monetary tightening. This dynamic underscores the importance of monitoring PPI trends for equity investors.
| Year | Average PPI YoY (%) | KOSPI Annual Return (%) |
|---|---|---|
| 2020 | 0.80 | -10.00 |
| 2021 | 1.20 | 30.00 |
| 2022 | 1.50 | -15.00 |
| 2023 | 1.10 | 12.00 |
| 2024 | 1.30 | 8.00 |
| 2025 (YTD) | 1.20 | 5.50 |
FAQs
- What is the Producer Price Index YoY for South Korea?
- The Producer Price Index YoY measures the annual percentage change in prices received by producers in South Korea. It reflects upstream inflation pressures that can influence consumer prices and monetary policy.
- How does the PPI affect South Korea’s economy?
- Rising PPI indicates increasing production costs, which can lead to higher consumer prices, impact corporate profits, and influence the Bank of Korea’s interest rate decisions.
- Why is the PPI important for investors?
- Investors monitor PPI to gauge inflation trends, anticipate central bank actions, and assess risks to equities, bonds, and currency markets.
Takeaway: South Korea’s November 2025 PPI YoY rise to 1.50% signals renewed upstream inflation pressures, warranting close monitoring for monetary policy shifts and market impacts.
KOSPI – South Korea’s benchmark stock index, sensitive to inflation and growth signals.
KRWUSD – The Korean won against the US dollar, reflecting currency strength amid inflation data.
SK – A major conglomerate with exposure to industrial inputs affected by PPI changes.
BTCUSD – Bitcoin, often viewed as an inflation hedge, reacts to inflation data globally.
USDKRW – The inverse currency pair, showing volatility around inflation prints.









The November 2025 PPI YoY of 1.50% marks a rebound from October’s 1.20% and is well above the 12-month average of 1.00%. This upward movement reverses the mid-year decline that bottomed at 0.30% in June 2025. The trend suggests a reacceleration of inflationary pressures at the producer level after a period of relative calm.
Comparing historical data, the current reading is below the 1.70% peak seen in February 2025 but indicates a steady recovery from the summer trough. The data aligns with global commodity price trends and domestic demand recovery, highlighting the cyclical nature of producer price inflation.