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 growth rate surpassed the 2.8% recorded in July, pushing the headline inflation figure back above 3%. The consumer price index reached 120.05, with 2020 set as the baseline of 100. Prices also grew by 0.2% from July. The Ministry of Data and Statistics published the August figures on September 2.
Fuel expenses continued to be a primary driver of inflation during the month. Petroleum product prices increased by 14.2% compared to the previous year, although the pace of growth slowed from July. Diesel prices surged by 19.6%, while gasoline costs rose by 11.5%. Petroleum-related items contributed 0.54 percentage points to the annual rise in consumer prices. Due to South Korea’s heavy dependence on imported energy, domestic fuel prices are highly responsive to shifts in global energy markets.
Mobile phone service prices also experienced a significant year-on-year jump. Charges for mobile services 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 comparison factor accounted for a considerable portion of August’s annual inflation increase.
Rising fuel and mobile expenses push up headline inflation
Core inflation, which excludes volatile food and energy prices, also gained momentum in August. The core consumer price index rose 3.4% year-over-year, marking the highest annual core reading since May 2023. Excluding agricultural products and petroleum, the index increased by 3.1% over the same period. Meanwhile, the living essentials price index grew by 3.2%, with food prices climbing 0.8% and nonfood items rising 4.8%.
Prices across broader categories of industrial products and services also showed gains. Industrial product prices advanced by 3.7% from a year earlier in August, while service costs grew by the same percentage. Electricity, gas, and water costs increased by 0.4%. Insurance premiums rose sharply by 13.4% annually. Additionally, overseas package tour prices went up by 14.9%, further contributing to the overall increase in service-related expenses for the month.
Food prices decline as service costs continue to grow
Conversely, prices for agricultural, livestock, and fishery products declined. The category fell 2.6% from the previous year, primarily due to lower vegetable and fruit prices. Fresh food prices dropped 6.7% annually, with fresh vegetables falling by 9.8%. Fresh fruit prices decreased by 10%, while fresh fish and seafood prices increased by 4.1%. Imported beef prices rose 6.2%, and domestic beef prices increased by 3.3%.
The August report highlighted uneven inflation across major household expenditure categories. Transportation costs increased by 7.2% from the previous year, while communication expenses rose by 16.6%. Recreation and cultural costs went up by 4.9%, and restaurant and accommodation expenses increased 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, partly offsetting the impact of rising petroleum prices.