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 marks a rise from 2.8% in July, pushing the headline inflation rate above 3%. The consumer price index reached 120.05, with 2020 as the base year of 100. Additionally, prices edged up 0.2% from July. The Ministry of Data and Statistics published these August figures on September 2.
Fuel expenses continued to be a significant factor in the upward price movement during the month. Petroleum product prices climbed 14.2% year-over-year, although the rate of increase slowed compared to July. Diesel prices surged by 19.6%, while gasoline costs rose by 11.5%. Petroleum-related products contributed 0.54 percentage points to the annual consumer price increase. South Korea’s heavy reliance on imported energy makes domestic fuel prices highly sensitive to fluctuations in global energy markets.
The cost of mobile phone services also experienced a notable annual rise. Mobile service charges increased 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. Government estimates indicated that without the mobile service effect, headline inflation would have been around 2.5%. This temporary factor played a significant role in the overall annual inflation rate for August.
Fuel and mobile expenses contribute to higher headline inflation
Core inflation, which excludes food and energy, also showed signs of strengthening in August. The core consumer price index rose 3.4% compared to the previous year, marking the highest annual reading since May 2023. When excluding agricultural products and petroleum, the index increased by 3.1%. The living essentials price index grew by 3.2%, with food prices up 0.8% and nonfood items increasing by 4.8%.
Broader data on prices revealed increases across various sectors. Industrial goods prices went up by 3.7% from the previous year, while service costs also increased by 3.7%. Electricity, gas, and water prices rose by 0.4%. Insurance premiums surged 13.4%, and overseas package tour prices climbed 14.9%, further contributing to the growth in service-related expenses in August.
Food prices decline as service costs climb
Prices for agricultural, livestock, and fishery products moved in the opposite direction, falling 2.6% from a year earlier. The decline was driven by lower prices for vegetables and fruits. Fresh food prices dropped by 6.7% annually, including a 9.8% decrease in fresh vegetables. Fresh fruit prices decreased by 10%, but fresh fish and seafood prices increased by 4.1%. Imported beef saw a 6.2% rise, while domestically produced beef prices grew by 3.3%.
The August report revealed uneven inflation across key household expense categories. Transportation costs increased by 7.2% year-over-year, while communication expenses rose by 16.6%. Recreation and cultural spending went up by 4.9%, with restaurant and accommodation costs rising 2.8%. Housing, water, electricity, and fuel prices increased by 1.9%. The government’s estimate suggests that nationwide fuel price caps reduced August’s inflation by approximately 0.3 percentage points, partially offsetting the impact of higher petroleum costs.