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 picked up from 2.8% in July, pushing the headline inflation rate above 3%. The consumer price index reached 120.05, with 2020 serving as the base year at 100. Additionally, prices grew by 0.2% from July. The Ministry of Data and Statistics announced the August figures on September 2.
Energy expenses continued to be a key factor behind the price increases during the month. Petroleum product prices rose 14.2% year-on-year, though the pace of growth slowed compared to July. Diesel prices surged 19.6%, while gasoline prices went up by 11.5%. These petroleum items contributed 0.54 percentage points to the annual consumer price growth. South Korea’s heavy reliance on imported energy makes domestic fuel costs highly sensitive to fluctuations in global markets.
Prices for mobile phone services also saw a significant rise on an annual basis. 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 data indicated that without this mobile service effect, headline inflation would have been approximately 2.5%. This temporary comparison factor thus played a major role in the August annual increase.
Rising fuel and mobile expenses drive headline inflation
Core inflation, which excludes food and energy, also gained momentum in August, with prices up 3.4% from a year earlier. This marked the strongest annual core reading since May 2023. The index that excludes agricultural products and petroleum rose by 3.1% over the same period. Meanwhile, the index for living essentials increased 3.2%, with food prices up 0.8% and nonfood items up 4.8%.
In broader terms, prices for industrial goods and services rose across the board. Industrial product prices climbed 3.7% from a year prior in August. Service prices also advanced by 3.7%, while costs for electricity, gas, and water went up by 0.4%. Insurance premiums increased 13.4%, and overseas package tour prices rose 14.9%, contributing to the overall increase in service costs during the month.
Food prices decline while service costs increase
Prices for agricultural, livestock, and fishery products moved in the opposite direction, falling 2.6% from the previous year, supported by lower vegetable and fruit prices. Fresh food prices declined by 6.7% annually, with fresh vegetables dropping 9.8%. Fresh fruit prices decreased 10%, although fresh fish and seafood prices rose by 4.1%. Imported beef prices increased 6.2%, while domestically produced beef rose 3.3%.
The August report revealed uneven inflation across major household expenditure categories. Transportation costs increased 7.2% year-on-year, while communication expenses went up by 16.6%. Recreation and culture prices increased by 4.9%, and costs for restaurants and accommodation rose 2.8%. Prices for housing, water, electricity, and fuel rose 1.9%. The government estimated that nationwide fuel price caps reduced August inflation by roughly 0.3 percentage points, partially offsetting the impact of higher petroleum prices.