SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation increased to 3.1% in August from the same month last year, according to official figures. This uptick follows a 2.8% rate in July, crossing back above the 3% mark. Consumer prices also saw a 0.2% rise from July to August. The Ministry of Data and Statistics indicated the consumer price index reached 120.05, using 2020 as the base year of 100. The primary contributors to the annual inflation were increases in fuel and mobile service costs.
Petroleum product prices rose by 14.2% compared to August 2025, exerting additional pressure on household transportation expenses. Diesel prices surged by 19.6%, while gasoline prices went up by 11.5%. Petroleum products accounted for a 0.54 percentage point contribution to the overall inflation rate. The cost of transportation overall increased by 7.2% year-on-year. The government stated that nationwide fuel price caps helped reduce August’s inflation by roughly 0.3 percentage point, partially counteracting the impact of rising energy costs.
Communication expenses also saw a significant increase due to a low comparison base from the previous year. Mobile phone service charges jumped 26.7% from August 2025. SK Telecom had offered substantial one-month discounts following a data breach during the same period last year. The government estimated that, without the mobile service effect, annual inflation would have been about 2.5%. Overall, communication prices rose 16.6%, making this category one of the largest annual increases within the consumer basket.
Fuel and telecom expenses drive upward pressure on prices
Core inflation, excluding food and energy, strengthened alongside the overall inflation rate. Prices in this core measure increased by 3.4% from the previous year, marking the highest rise since May 2023. Another indicator, which excludes agricultural products and petroleum, advanced by 3.1%. The index for essential living items, reflecting common household purchases, grew by 3.2%. Within this, food prices increased by 0.8%, while nonfood prices climbed by 4.8% compared to the previous year.
Prices for industrial goods and services also experienced broad annual growth in August. Industrial product prices increased by 3.7%, with service costs rising by the same percentage. Costs for electricity, gas, and water went up 0.4% year-on-year. Insurance premiums jumped 13.4%, and prices for overseas package tours increased by 14.9%. Restaurant and accommodation costs rose by 2.8%, while recreation and cultural expenses grew by 4.9%, contributing to the broader increase in service-related expenditures.
Decline in Fresh Food Prices Amid Overall Inflation
Prices for agricultural, livestock, and fishery products offered some relief during the month, decreasing by 2.6% from the previous year. Fresh food prices fell by 6.7%, primarily due to declines in vegetables and fruits. Fresh vegetable prices dropped 9.8%, and fresh fruit prices decreased 10%. Conversely, prices for fresh fish and seafood increased by 4.1%. Imported beef prices rose by 6.2%, while domestic beef prices gained 3.3% over the same period.
The August data revealed a mixed pattern in inflation across major household spending categories. Housing, water, electricity, and fuel costs rose 1.9% compared to last year. Food prices remained relatively subdued as fresh produce became more affordable, whereas energy, communication, and several service sectors experienced larger gains. The 3.1% headline inflation rate reflected these contrasting trends within the consumer basket. Additionally, the figures indicated that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation increase.