SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation climbed to 3.1% in August compared to the same month last year, according to official statistics. This marks an increase from 2.8% in July, crossing back above the 3% mark. Additionally, consumer prices saw a 0.2% rise from July to August. The Ministry of Data and Statistics reported the consumer price index hit 120.05, with 2020 as the base year of 100. Significant contributions to the annual rise came from higher fuel and mobile telecommunication costs.
Petroleum prices increased by 14.2% compared to August 2025, adding pressure to household transportation expenses. Diesel costs surged 19.6%, while gasoline prices went up by 11.5%. Petroleum-related products contributed 0.54 percentage points to the yearly inflation rate. Overall, transportation costs increased by 7.2% from the previous year. The government noted that nationwide fuel price caps reduced August’s inflation by approximately 0.3 percentage points, partly offsetting the impact of rising energy prices.
Communication expenses rose sharply, partly due to a low comparison base from last year. Mobile service charges jumped 26.7% from August 2025, following SK Telecom’s substantial one-month discounts after a data breach during the same period last year. The government estimated that without this mobile service effect, annual inflation would have been around 2.5%. Overall, communication prices increased by 16.6%, making it one of the categories with the largest annual gains within the consumer basket.
Rising Fuel and Telecom Costs Drive Price Growth
Price pressures beyond the headline inflation rate also intensified. Core inflation, excluding food and energy, rose 3.4% from a year earlier, the highest since May 2023. An alternative measure excluding agricultural products and petroleum increased by 3.1%. The index tracking essential household items grew by 3.2%, with food prices up 0.8% and nonfood prices up 4.8% compared to the previous year.
Broad increases were also seen in industrial goods and services in August. Industrial product prices rose 3.7%, with service costs rising by the same rate. Electricity, gas, and water costs increased 0.4% annually. Insurance premiums jumped 13.4%, while overseas package tour prices climbed 14.9%. Restaurant and accommodation costs rose 2.8%, and recreation and culture expenses increased 4.9%, reflecting overall service sector inflation.
Lower Fresh Food Prices Amid Inflationary Trends
Prices for agricultural, livestock, and fishery products declined 2.6% compared to last year. Fresh food prices fell 6.7%, mainly driven by drops in vegetables and fruit. Vegetables decreased by 9.8%, and fruits by 10%. Conversely, fresh fish and seafood prices increased by 4.1%. Imported beef prices rose 6.2%, and domestic beef by 3.3% over the same period.
The August figures reveal uneven inflation across major household expenditure categories. Costs for housing, water, electricity, and fuel increased by 1.9% year-on-year. While food prices remained relatively restrained due to cheaper fresh produce, energy, communication, and various service sectors experienced larger increases. The 3.1% headline inflation rate reflects these contrasting movements within the consumer basket. The data also indicates that temporary effects from mobile pricing and higher petroleum costs significantly contributed to South Korea’s annual inflation increase.