SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% in August compared to the same month last year, according to official statistics. This acceleration from 2.8% in July pushed the headline inflation rate above 3%. The consumer price index stood at 120.05, with 2020 as the base year of 100. Additionally, prices saw a 0.2% rise from July. The Ministry of Data and Statistics released these August figures on September 2.
During the month, fuel expenses continued to exert significant upward pressure on prices. Petroleum product prices climbed 14.2% compared to the previous year, though the pace slowed relative to July. Diesel costs surged by 19.6%, while gasoline prices increased by 11.5%. Petroleum products contributed an additional 0.54 percentage points to the overall annual consumer price growth. South Korea’s heavy reliance on imported energy makes its domestic fuel costs particularly sensitive to shifts in global energy markets.
Charges for mobile phone services also experienced a notable year-on-year rise. Mobile service prices jumped 26.7% from August 2025, partly due to a low comparison base. Last year, SK Telecom offered substantial discounts for one month following a data breach. Government estimates indicated that, without this mobile service factor, headline inflation would have been around 2.5%. As a result, this temporary comparison significantly contributed to August’s annual inflation figure.
Fuel and mobile service increases drive headline inflation higher
Underlying inflationary pressures also grew in August. Core consumer prices, which exclude food and energy, rose by 3.4% from the previous year, marking the strongest annual core inflation reading since May 2023. The index excluding agricultural products and petroleum increased by 3.1% over the same period. Additionally, the price index for essential living items rose 3.2%, with food prices up 0.8% and nonfood items climbing 4.8%.
Broader inflation data indicated increases across industrial goods and services. Prices of industrial products went up 3.7% year-on-year in August, while service costs also rose by 3.7%. Electricity, gas, and water costs increased slightly by 0.4%. Insurance premiums surged by 13.4% compared to the previous year. Meanwhile, overseas package tour prices jumped 14.9%, further contributing to the overall rise in service costs for the month.
Food prices decline while service costs rise
In contrast, prices for agricultural, livestock, and fishery products fell by 2.6% annually, mainly driven by lower vegetable and fruit costs. Fresh food prices decreased 6.7% year-on-year, including a 9.8% drop in fresh vegetables. While fresh fruit prices declined by 10%, prices for fresh fish and seafood increased by 4.1%. Imported beef prices went up 6.2%, and domestically produced beef prices rose by 3.3%.
The August report highlighted uneven inflation across key household expenditure categories. Transportation costs increased 7.2% from the previous year, while communication expenses rose 16.6%. Prices for recreation and cultural activities climbed 4.9%, and restaurant and accommodation costs grew by 2.8%. Housing, water, electricity, and fuel expenses increased 1.9%. The government estimates that nationwide fuel price caps reduced August’s inflation by about 0.3 percentage points, partly offsetting the impact of rising petroleum prices.