SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% in August compared to the same month last year, according to official statistics. This uptick from 2.8% in July pushed headline inflation back above 3%. The consumer price index hit 120.05, with 2020 serving as the baseline at 100. Additionally, prices grew by 0.2% from July. The Ministry of Data and Statistics published the August data on September 2.
A significant factor contributing to the inflationary pressure in August was the persistent rise in fuel costs. Petroleum product prices increased by 14.2% from the previous year, although this rate slowed compared to July. Diesel prices surged by 19.6%, while gasoline costs went up by 11.5%. Petroleum products added 0.54 percentage points to the annual consumer price growth. South Korea’s heavy reliance on imported energy means domestic fuel prices remain highly sensitive to global market fluctuations.
The cost of mobile phone services also experienced a notable annual climb. Prices for mobile services rose 26.7% from August 2025, which was influenced by an unusually low comparison base. SK Telecom had offered substantial discounts for a month last year following a data breach. According to government estimates, headline inflation would have been approximately 2.5% without the mobile service price effect. This temporary comparison factor significantly contributed to the August annual inflation rate.
Rising fuel and mobile costs drive up headline inflation
Inflation excluding volatile food and energy prices, known as core inflation, also gained momentum in August. The core consumer price index increased by 3.4% year over year, marking the highest annual reading since May 2023. When excluding agricultural products and petroleum, the index advanced 3.1%. The index for living essentials rose by 3.2%, with food prices up 0.8% and nonfood items increasing by 4.8%.
Price data across a broader spectrum showed increases in both industrial goods and service sectors. Industrial product prices went up by 3.7% compared to the previous year in August. Service costs also increased by 3.7%, while electricity, gas, and water bills rose 0.4%. Insurance premiums surged 13.4% annually. Additionally, overseas package tour prices increased by 14.9%, contributing to the overall service cost rise during the month.
Food prices decline while service costs continue to rise
In contrast, prices for agricultural, livestock, and fishery products fell 2.6% from a year earlier, mainly due to lower vegetable and fruit costs. Fresh food prices dropped by 6.7% annually, including a 9.8% decrease in fresh vegetables. Prices for fresh fruit declined by 10%, whereas fresh fish and seafood increased by 4.1%. Imported beef prices rose 6.2%, with domestically produced beef prices climbing 3.3%.
The August report highlighted uneven inflation across key household expenditure categories. Transportation costs increased by 7.2% year over year, while communication expenses jumped by 16.6%. Recreation and cultural service prices rose 4.9%, and costs for restaurants and accommodations increased 2.8%. Prices for housing, water, electricity, and fuel went up 1.9%. The government estimated that nationwide fuel price caps lowered August inflation by roughly 0.3 percentage points, partially counteracting the higher petroleum costs.