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 figures. This acceleration from 2.8% in July pushed headline inflation above the 3% mark. The consumer price index reached 120.05, with 2020 serving as the base period of 100. Prices also saw a month-over-month rise of 0.2%. The Ministry of Data and Statistics announced the August data on September 2.
Energy prices remained a significant contributor to the inflationary trend during the month. Petroleum product costs increased by 14.2% year-on-year, although the pace of growth slowed compared to July. Diesel prices surged 19.6%, while gasoline costs rose 11.5%. Petroleum-related items added 0.54 percentage points to the annual consumer price growth. South Korea’s heavy reliance on imported energy renders domestic fuel prices highly sensitive to fluctuations in international energy markets.
Prices for mobile phone services also experienced a substantial annual jump. Mobile service fees grew by 26.7% from August 2025, largely due to an unusually low comparison base. Last year, SK Telecom offered substantial discounts for one month following a data breach incident. Government estimates indicated that without the mobile service impact, headline inflation would have been approximately 2.5%. Therefore, this temporary comparison factor significantly contributed to the August annual increase.
Rising fuel and mobile costs push up overall inflation rate
Core inflation, which excludes food and energy, also showed an upward trend in August. The core consumer prices climbed 3.4% from the previous year, marking the strongest annual core reading since May 2023. Excluding agricultural products and petroleum, the index increased by 3.1% over the same period. The index for essential living costs rose 3.2%, with food prices up 0.8% and nonfood items increasing 4.8%.
Wider price data reflected increases across various sectors. Industrial product prices rose by 3.7% compared to the previous year in August. Service prices also went up 3.7%, while costs for electricity, gas, and water increased by 0.4%. Insurance premiums jumped 13.4% year-on-year. Additionally, prices for overseas package tours surged 14.9%, contributing to the overall increase in service costs for the month.
Food prices decline while service expenses continue to rise
In contrast, prices for agricultural, livestock, and fishery products decreased. This segment fell 2.6% compared to the previous year, driven by lower vegetable and fruit prices. Fresh food costs dropped 6.7% annually, including a 9.8% decline in fresh vegetables. Fresh fruit prices fell 10%, whereas fresh fish and seafood costs increased by 4.1%. Imported beef prices rose 6.2%, and domestically produced beef prices went up by 3.3%.
The August report illustrated uneven inflation across key household expenditure categories. Transportation expenses increased by 7.2% year-on-year, while communication costs rose by 16.6%. Recreation and cultural spending climbed 4.9%, with restaurant and accommodation prices rising 2.8%. Housing, water, electricity, and fuel costs edged up 1.9%. The government estimated that nationwide fuel price caps reduced August inflation by approximately 0.3 percentage points, partially offsetting the rise in petroleum costs.