SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% in August compared to the previous year, according to official statistics. This uptick outpaced July’s 2.8%, pushing overall inflation above the 3% mark. The consumer price index hit 120.05, with 2020 serving as the base year at 100. Prices also grew by 0.2% from July. The Ministry of Data and Statistics published the August figures on September 2.
Fuel prices remained a significant contributor to the inflationary pressure throughout the month. Petroleum product costs increased by 14.2% year-over-year, although the rate of growth slowed relative to July. Diesel prices surged by 19.6%, and gasoline costs rose by 11.5%. Petroleum-related products added 0.54 percentage points to the annual consumer price increase. South Korea’s dependence on imported energy makes domestic fuel prices highly sensitive to global market fluctuations.
Mobile phone service fees also saw a substantial year-on-year rise. Mobile service prices climbed 26.7% from August 2025, mainly due to an unusually low comparison base. Last year, SK Telecom provided significant 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 significantly contributed to the annual increase observed in August.
Rising fuel and mobile costs push headline inflation upward
Core inflation, excluding volatile food and energy prices, also showed signs of strengthening in August. The core consumer price index increased by 3.4% compared to the previous year, marking the highest annual core reading since May 2023. Excluding agricultural products and petroleum, the index gained 3.1%. The index for essentials such as living necessities rose by 3.2%, with food prices up 0.8% and nonfood items climbing 4.8%.
Broader inflationary trends highlighted increases across various sectors. Prices for industrial goods rose by 3.7% annually in August, while service sector prices also grew by 3.7%. Electricity, gas, and water expenses increased by 0.4%. Insurance premiums jumped 13.4% year-over-year. Prices for overseas package tours surged by 14.9%, further contributing to the growth in service costs during the month.
Food prices decline as service costs climb
Prices for agricultural, livestock, and fishery products moved in the opposite direction, falling by 2.6% compared to the previous year. This decline was driven by lower vegetable and fruit prices. Fresh food prices decreased by 6.7% annually, including a 9.8% drop in fresh vegetables. While fresh fruit prices fell by 10%, fresh fish and seafood prices increased by 4.1%. Imported beef prices grew by 6.2%, and domestically produced beef prices rose by 3.3%.
The August report also revealed uneven inflation across major household expenditure categories. Transportation costs rose by 7.2% from a year earlier, whereas communication expenses increased by 16.6%. Recreation and cultural services prices increased by 4.9%, and costs for restaurants and accommodations went up by 2.8%. Housing, water, electricity, and fuel prices rose by 1.9%. The government estimated that nationwide fuel price caps reduced August inflation by approximately 0.3 percentage points, partially offsetting the upward pressure from higher petroleum prices.