SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices experienced a 3.1% increase in August compared to the same month last year, according to official statistics. This rise represents an acceleration from July’s 2.8% and pushes the headline inflation rate back above 3%. The consumer price index hit 120.05, with 2020 designated as the base year at 100. Prices also edged up by 0.2% relative to July. The Ministry of Data and Statistics published the August figures on September 2.
A key factor behind the month’s inflation was the continued rise in fuel costs. The price of petroleum products climbed 14.2% from the previous year, although the pace of increase slowed compared to July. Diesel prices surged by 19.6%, and gasoline costs increased by 11.5%. These petroleum-related expenses contributed 0.54 percentage points to the overall annual consumer price growth. South Korea’s heavy reliance on imported energy makes domestic fuel prices particularly sensitive to fluctuations in global energy markets.
Mobile phone service fees also saw a notable annual escalation. Prices for mobile services rose 26.7% from August 2025, largely due to a low comparison baseline. SK Telecom offered significant discounts for one month last year following a data breach, which affected the year-over-year comparison. Government estimates suggest that, without the mobile service discount impact, headline inflation would have been approximately 2.5%. Consequently, this temporary comparison factor played a major role in the August annual inflation figure.
Rising fuel and mobile expenses drive overall inflation
Core inflation, which excludes volatile food and energy prices, also showed increased momentum in August. It rose 3.4% from a year earlier, marking the strongest annual core figure since May 2023. The index excluding agricultural products and petroleum grew by 3.1% over the same period. Additionally, the index for essential living costs increased by 3.2%, with food prices up 0.8% and nonfood items climbing 4.8%.
Broader price indices indicated widespread increases across both industrial goods and service sectors. The price of industrial products went up 3.7% compared to the previous year, while service charges also rose by 3.7%. Costs related to electricity, gas, and water saw a 0.4% rise, and insurance premiums increased notably by 13.4%. Overseas package tour prices experienced a 14.9% hike, further contributing to the overall increase in service costs for the month.
Food prices decline as service sector costs climb
In contrast, prices for agricultural, livestock, and fishery products moved in the opposite direction. This category decreased by 2.6% compared to last year, helped by lower prices for vegetables and fruits. Fresh food prices fell by 6.7% annually, including a 9.8% drop in fresh vegetables. While fresh fruit prices declined by 10%, fresh fish and seafood prices increased by 4.1%. Imported beef prices rose 6.2%, with domestically produced beef prices up 3.3%.
The August report also highlighted uneven inflation across different household expenditure categories. Transportation costs increased by 7.2% year-over-year, while communication expenses jumped 16.6%. Prices for recreation and cultural activities rose 4.9%, and costs for dining out and accommodation climbed 2.8%. Expenses related to housing, water, electricity, and fuel increased by 1.9%. The government estimates that nationwide fuel price caps helped to reduce August inflation by approximately 0.3 percentage points, partially offsetting the impact of higher petroleum prices.