SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% in August compared to the previous year, according to official figures. This growth rate surpassed July’s 2.8%, pushing headline inflation back above 3%. The consumer price index hit 120.05, with 2020 as the base year of 100. Prices also saw a 0.2% rise from July. The Ministry of Data and Statistics published the August statistics on September 2.
Fuel prices continued to exert strong upward pressure during the month. Petroleum product costs increased 14.2% year-on-year, though this rate slowed compared to July. Diesel prices rose 19.6%, while gasoline gained 11.5%. Petroleum products contributed 0.54 percentage points to the annual consumer price increase. As South Korea depends heavily on imported energy, domestic fuel prices are particularly sensitive to shifts in global energy markets.
Mobile phone service costs also saw a sharp yearly rise. Prices for mobile services jumped 26.7% from August 2025, partly due to a low comparison base. Last year, SK Telecom offered significant discounts for one month after a data breach. Government estimates suggest that without this mobile service effect, headline inflation would have been roughly 2.5%. This temporary factor played a significant role in August’s annual inflation figure.
Fuel and telecom expenses drive up headline inflation
Core inflation, which excludes food and energy, also rose in August. It increased by 3.4% compared to the previous year, the strongest since May 2023. Excluding agricultural products and petroleum, the index grew 3.1%. The index for essential living costs went up 3.2%, with food prices increasing 0.8% and nonfood items up 4.8%.
Broader price data show increases across industrial goods and services. Industrial product prices climbed 3.7% year-on-year in August. Service prices also grew by 3.7%, while costs for electricity, gas, and water rose 0.4%. Insurance premiums increased 13.4% from a year earlier. The cost of overseas package tours rose 14.9%, further contributing to the rise in service-related expenses this month.
Food prices decline, but services see gains
Prices for agricultural, livestock, and fishery products moved in the opposite direction. They fell 2.6% compared to last year. Lower vegetable and fruit prices played a part. Fresh food prices dropped 6.7% annually, with fresh vegetables down 9.8%. Fresh fruit prices declined 10%, while fresh fish and seafood increased 4.1%. Imported beef prices rose 6.2%, and domestic beef prices increased 3.3%.
The August report shows uneven inflation across key household spending categories. Transportation costs increased 7.2% year-on-year. Communication expenses rose 16.6%. Recreation and cultural prices went up 4.9%, and restaurant and accommodation costs increased 2.8%. Prices for housing, water, electricity, and fuel went up 1.9%. The government estimates that nationwide fuel price caps lowered August inflation by about 0.3 percentage points, offsetting some of the higher petroleum costs.