South Korea’s terms of trade improved to a four-month high in December as import prices fell at a faster pace than export costs, the central bank said Thursday.

The country’s net terms-of-trade index for goods ― a gauge of trade terms ― came in at 89.9 in December, up 1.9 percent from a year earlier, according to the Bank of Korea. It marked the highest since 90.4, tallied for August last year. The index is calculated by dividing the export price index by the import price index. The base year is 2010, with a benchmark index of 100.

For the whole of 2013, the net terms-of-trade index for goods rose 2.6 percent from a year earlier. The BOK said that import prices declined at a faster clip than export costs, improving the index from the previous year.

Korea’s income terms-of-trade index, another gauge of trade terms, sharply improved last month from a year earlier as the volume of exports picked up. (Yonhap News)