SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices saw a 3.1% rise in August compared to the same month last year, according to official figures. This marks an acceleration from July’s 2.8%, pushing the headline inflation rate back above 3%. The consumer price index hit 120.05, with 2020 designated as the base year of 100. Additionally, prices increased by 0.2% from July. The Ministry of Data and Statistics announced the August data on September 2.
During the month, fuel expenses remained a significant contributor to rising prices. Petroleum product prices grew 14.2% year-over-year, although this pace slowed from July. Diesel prices jumped by 19.6%, while gasoline prices increased by 11.5%. Petroleum products added 0.54 percentage points to the annual consumer price growth. As South Korea depends heavily on imported energy, domestic fuel costs are highly sensitive to fluctuations in global energy markets.
In addition, mobile phone service charges experienced a notable annual surge. Mobile service prices rose 26.7% compared to August 2025, a figure influenced by an unusually low baseline. Last year, SK Telecom provided significant discounts for a month following a data breach. Government estimates indicate that without this mobile service effect, headline inflation would have been approximately 2.5%. Consequently, this temporary comparison played a major role in August’s annual inflation increase.
Rising fuel and mobile expenses drive overall inflation
Core inflation, excluding volatile food and energy prices, also gained momentum in August. The core consumer price index increased 3.4% from a year earlier, marking the strongest annual core reading since May 2023. Excluding agricultural products and petroleum, the index rose by 3.1% over the same period. Meanwhile, the index for living essentials grew 3.2%, with food prices up 0.8% and nonfood items rising 4.8%.
Broader inflationary trends included increases across both industrial goods and services. Industrial product prices advanced 3.7% year-over-year in August, with service costs also climbing 3.7%. Electricity, gas, and water expenses grew by 0.4%, while insurance premiums surged 13.4%. Overseas package tour costs increased by 14.9%, contributing to the overall rise in service prices during the month.
Prices for food decrease while service costs continue to climb
In contrast, prices for agricultural, livestock, and fishery products declined. This category fell 2.6% from the previous year, primarily due to lower prices for vegetables and fruits. Fresh food prices dropped 6.7% annually, including a 9.8% decline in fresh vegetables. Fresh fruit prices fell 10%, whereas fresh fish and seafood prices increased 4.1%. Imported beef costs rose 6.2%, with domestically produced beef prices increasing by 3.3%.
The August report highlights uneven inflation across major household expenditure categories. Transportation costs rose 7.2% compared to the previous year, while communication expenses increased 16.6%. Prices for recreation and cultural activities went up 4.9%, and restaurant and accommodation prices increased by 2.8%. Housing, water, electricity, and fuel costs saw a 1.9% rise. The government estimated that nationwide fuel price caps reduced August inflation by roughly 0.3 percentage points, partially offsetting the impact of higher petroleum prices.