Korea’s producer prices declined for the first time in nearly three years in July on falling oil costs, the central bank said Friday, pointing to easing pressure on consumer inflation in Asia’s fourth-largest economy.

The producer price index, a barometer of future consumer inflation, fell 0.1 percent in July from a year earlier, a turnaround from a 0.8 percent on-year gain in June, according to the Bank of Korea.

The July figure marks the first decline since November 2009 when such prices declined 0.4 percent on-year.

Compared with the previous month, the index shed 0.5 percent in July after falling 1.4 percent the previous month, it added. It marked the fourth straight month of declines.

The BOK said falls in agricultural product prices and retreats in oil costs drove down the country’s producer prices last month.

The data comes one day after BOK policymakers froze the key interest rate at 3 percent, following a surprise rate cut in July.

Analysts predicted that the central bank is likely to further cut the rate within this year, given sputtering growth and eased inflationary pressure.

The Korean economy grew 0.4 percent on-quarter in the second quarter on weakening exports and sluggish domestic demand. The country’s annual consumer inflation eased to a 12-year low of 1.5 percent in July.

BOK Gov. Kim Choong-soo said on Thursday that rising global grain prices will likely serve as upward pressure on consumer prices after the end of this year, but their impacts on inflation will not be large.

The BOK aims to keep the median consumer inflation target at 3 percent with a margin of plus or minus 1 percentage point for 2010-2012. (Yonhap News)