SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation accelerated to 3.1% in August compared to the same month last year, according to official statistics. This marks an increase from 2.8% recorded in July, pushing the inflation rate back above 3%. Additionally, consumer prices saw a 0.2% rise from July to August. The Ministry of Data and Statistics reported the consumer price index reached 120.05, using 2020 as the base year with a value of 100. The primary contributors to the annual increase were higher costs for fuel and mobile services.
Petroleum prices surged by 14.2% from August 2025, adding further pressure to household transportation expenses. Specifically, diesel prices increased by 19.6%, and gasoline prices went up by 11.5%. These petroleum products contributed approximately 0.54 percentage points to the overall inflation rate for the year. Overall transportation costs advanced by 7.2% compared to the previous year. The government mentioned that nationwide fuel price caps helped reduce the August inflation rate by roughly 0.3 percentage points, partly mitigating the impact of rising energy costs.
Communication expenses also experienced a notable jump due to a low comparison base from the previous year. Mobile phone service charges increased by 26.7% from August 2025. SK Telecom had offered significant one-month discounts following a data breach during that same period last year. The government estimated that without the mobile service effect, annual inflation would have been around 2.5%. Overall, communication costs rose by 16.6%, making this category one of the largest contributors to the annual inflation in the consumer basket.
Rising Fuel and Communication Expenses Drive Price Increases
Underlying inflationary pressures gained strength alongside the headline rate. Core prices, which exclude food and energy, increased by 3.4% from a year earlier, marking the strongest gain since May 2023. An alternative measure that omits agricultural products and petroleum rose by 3.1%. The index for essential living goods, tracking frequently purchased household items, went up by 3.2%. Within this index, food prices grew by 0.8%, while nonfood prices increased by 4.8% compared to the previous year.
Broad increases were also observed in industrial goods and services during August. Prices for industrial products rose by 3.7%, with service prices climbing by the same percentage. Electricity, gas, and water costs saw a modest increase of 0.4% year-over-year. Insurance premiums jumped by 13.4%, and overseas package tour prices rose by 14.9%. Additionally, restaurant and accommodation expenses went up by 2.8%. Costs related to recreation and culture increased by 4.9%, contributing to the overall rise in service-related spending.
Decline in Fresh Food Prices Contrasts Broader Inflation
Prices for agricultural, livestock, and fishery products provided some relief during the month. This category saw a decrease of 2.6% from the previous year. Fresh food items, including vegetables and fruits, experienced significant price drops — vegetables by 9.8% and fruits by 10%. Meanwhile, fresh fish and seafood prices increased by 4.1%. Imported beef prices rose by 6.2%, while domestic beef prices went up by 3.3% over the same period.
The August data revealed that inflation across major household expenditure categories remains uneven. Costs for housing, water, electricity, and fuel increased by 1.9% compared to the previous year. While fresh produce became more affordable, energy, communication, and several service sectors saw larger price hikes. The overall 3.1% inflation rate reflects these contrasting movements within the consumer basket. The data also indicates that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation increase.