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 represents a growth from 2.8% in July and pushes the headline inflation rate back above 3%. The consumer price index reached 120.05, with 2020 serving as the base year at 100. Additionally, prices grew 0.2% from July. The Ministry of Data and Statistics published these August figures on September 2.
A key contributor to the inflation was the persistent rise in fuel costs. Petroleum product prices went up 14.2% year-on-year, although the pace slowed compared to July. Diesel prices surged 19.6%, with gasoline up 11.5%. Petroleum products contributed 0.54 percentage points to the annual inflation figure. South Korea’s heavy reliance on imported energy makes domestic fuel prices highly sensitive to global energy market fluctuations.
Mobile phone service charges also saw a notable jump. Prices for mobile services rose 26.7% from August 2025, mainly due to a low comparison base. Last year, SK Telecom offered significant discounts for a month following a data breach. Without this mobile service factor, government estimates suggest the headline inflation would have been around 2.5%. Consequently, this temporary comparison played a significant role in August’s annual inflation increase.
Rising fuel and mobile expenses push inflation higher
Core inflation, which excludes food and energy, also gained momentum in August, increasing 3.4% year-on-year—the highest since May 2023. The index excluding agricultural products and petroleum rose by 3.1%, while the living essentials index climbed 3.2%. Food prices grew 0.8%, with nonfood items rising 4.8%.
Broader prices across sectors indicated general increases. Industrial product prices climbed 3.7%, mirroring service costs, which also rose 3.7%. Electricity, gas, and water costs increased 0.4%, with insurance premiums jumping 13.4%. Overseas package tours became 14.9% more expensive, contributing to overall service cost increases during the month.
Food prices decline while service costs continue to rise
Prices for agricultural, livestock, and fishery products moved in the opposite direction, falling 2.6% from the previous year, mainly due to lower vegetable and fruit prices. Fresh food prices dropped 6.7% annually, including a 9.8% decrease in fresh vegetables. Fresh fruit prices declined 10%, but fresh fish and seafood prices increased 4.1%. Imported beef prices rose 6.2%, and domestic beef prices went up 3.3%.
The August report revealed uneven inflation across major household categories. Transportation costs increased 7.2%, communication expenses rose 16.6%, and recreation and culture prices grew 4.9%. Restaurant and accommodation prices climbed 2.8%, while housing, water, electricity, and fuel costs rose 1.9%. The government estimated that nationwide fuel price caps reduced August inflation by about 0.3 percentage points, partially offsetting the impact of higher petroleum prices.