Pushed in part by semiconductor chip bills, South Korea's producer price index (PPI) rose 1.9% on year in January, matching the index's on-year gains of November 2025 and December 2025, the Bank of Korea (BOK) reported on Tuesday.

The computers, electronic and optical equipment category PPI rose 8.3% on year in January, including a 13.6% rise in chip prices, according to the central bank.

The services PPI rose 2.6% on year in January, while the broad manufactured-products PPI rose 1.8%, according to the BOK.

In contrast, the coal and petroleum products PPI declined 12.4% on year in January, reflecting lower fossil fuel bills, and utility charges PPI declined 1.2% on year.

South Korea's PPI gauges prices at domestic factory or farm gates, in transactions between business enterprises. The PPI is distinct from the consumer price index (CPI) which measures prices at retail locations faced by ordinary shoppers.

However, the PPI is considered one leading indicators of the CPI, as retailers try to recoup costs or pass on savings to customers.

"The producer price index (PPI) has continued to rise and could exert upward pressure on consumer prices going forward. But the increase has been largely driven by higher prices of intermediate goods, such as primary metal products and semiconductors, and there would be a time lag before it is passed on to consumer prices," Lee Moon-hee, Bank of Korea official, told a press briefing, reported the Yonhap News Service.

Separately, South Korea's CPI rose 2% on year in January, easing from a 2.3% on-year rise in December 2025, and marking the lowest inflation reading since August.

The Bank of Korea has a 2% annual target on the nation's CPI.