SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation increased to 3.1% in August compared to the same month last year, according to official figures. The rate has moved back above 3%, climbing from 2.8% in July, with consumer prices also rising 0.2% compared to July. The Ministry of Data and Statistics reported that the consumer price index reached 120.05, using 2020 as the base year with a value of 100. The primary contributors to this annual increase were higher costs for fuel and mobile services.
Petroleum product prices experienced a 14.2% rise from August 2025, putting additional pressure on household transportation expenses. Diesel prices grew by 19.6%, while gasoline costs increased by 11.5%. Petroleum-related products added 0.54 percentage points to the annual inflation figure. Overall, transportation costs surged 7.2% year-over-year. The government indicated that nationwide fuel price caps helped keep August inflation about 0.3 percentage points lower, thereby partially offsetting the impact of rising energy prices.
Communication expenses also saw a sharp increase, largely due to a low comparison base from the previous year. Mobile service charges jumped 26.7% from August 2025. SK Telecom offered significant one-month discounts following a data breach during the same period last year. The government approximated that without the mobile service effect, annual inflation would have been around 2.5%. As a result, communication costs overall rose 16.6%, making this category one of the largest contributors to the year’s consumer price increases.
Rising fuel and telecom expenses contribute to higher inflation
Price pressures across various categories intensified alongside the overall inflation rate. Excluding food and energy, core prices increased by 3.4% compared to the previous year, marking the strongest gain since May 2023. A separate measure excluding agricultural products and petroleum advanced by 3.1%. The index tracking household essentials rose 3.2%, with food prices up 0.8% and nonfood items climbing 4.8% from a year earlier.
Increases were also broad-based in industrial goods and services for August. Industrial product prices rose 3.7%, matching the rise in service prices. Costs for electricity, gas, and water went up 0.4% year-over-year. Insurance premiums increased by 13.4%, and overseas package tour prices jumped 14.9%. Restaurant and accommodation expenses rose 2.8%, while costs for recreation and culture advanced 4.9%, reflecting a wider upward trend in service-related expenditures.
Food prices decline despite overall inflation gaining ground
During the month, prices for agricultural, livestock, and fishery products eased, providing some relief. This category declined 2.6% compared to the previous year, with fresh food prices dropping 6.7%. Vegetables and fruits experienced notable decreases, with fresh vegetable prices falling 9.8% and fresh fruit prices down 10%. Conversely, the prices of fresh fish and seafood increased by 4.1%. Imported beef prices went up 6.2%, while domestic beef prices rose 3.3% over the same period.
The August data highlighted a patchwork of inflation effects across key household spending segments. Housing, water, electricity, and fuel costs increased by 1.9% from the previous year. Meanwhile, food prices remained relatively subdued as fresh produce became more affordable, but energy, communication, and several service categories experienced larger rises. The 3.1% headline rate reflected these contrasting movements within the consumer basket. Additionally, the data indicated that temporary mobile pricing effects and increased petroleum costs significantly contributed to South Korea’s annual inflation rate.