SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation reached 3.1% in August compared to the previous year, according to official statistics. This marks an increase from 2.8% in July and a return above the 3% threshold. Consumer prices also experienced a 0.2% rise from July. The Ministry of Data and Statistics reported that the consumer price index hit 120.05, using a 2020 base of 100. The notable rise was mainly driven by higher costs for fuel and mobile services.
Petroleum product prices surged 14.2% from August 2025, adding to household transportation expenses. Diesel costs increased by 19.6%, and gasoline prices went up by 11.5%. These petroleum-related products contributed 0.54 percentage points to the annual inflation rate. Overall transportation expenses rose 7.2% compared to the previous year. The government indicated that nationwide fuel price caps helped reduce August’s inflation by approximately 0.3 percentage points, partially offsetting the impact of rising energy prices.
Communication expenses also rose sharply, primarily due to a low comparison base from last year. Mobile phone charges jumped 26.7% from August 2025. SK Telecom offered substantial one-month discounts following a data breach during the same period last year. The government estimated that without the mobile service effect, annual inflation would have been roughly 2.5%. Overall, communication prices increased 16.6%, making this category one of the largest contributors to the annual consumer basket increase.
Fuel and telecom expenses drive higher consumer prices
Underlying inflationary pressures grew alongside the overall rate. Core prices, which exclude food and energy, rose 3.4% from a year earlier, marking the strongest increase since May 2023. An additional measure that excludes agricultural and petroleum products advanced 3.1%. The living essentials index, which tracks items commonly purchased by households, increased by 3.2%. Within this measure, food prices rose 0.8%, while nonfood costs gained 4.8% from the previous year.
Broad annual increases were also seen in industrial goods and services during August. Prices of industrial products climbed 3.7%, with service costs rising at the same rate. Electricity, gas, and water expenses increased by 0.4% year-on-year. Insurance premiums jumped 13.4%, and overseas package tour prices rose 14.9%. Restaurant and accommodation costs increased by 2.8%. Recreation and culture expenditures grew by 4.9%, contributing to the overall rise in service-related costs.
Prices for fresh produce decline despite overall inflation
Prices for agricultural, livestock, and fishery products offered some relief in August, falling 2.6% year-on-year. Fresh food prices dropped 6.7%, mainly due to decreases in vegetables and fruits. Vegetable prices fell 9.8%, and fruit prices declined 10%. Conversely, prices for fresh fish and seafood increased by 4.1%. Imported beef costs rose 6.2%, while domestic beef prices gained 3.3% during the same period.
The August data revealed that inflation levels remain uneven across major household expenditure categories. Costs for housing, water, electricity, and fuel increased by 1.9% compared to the previous year. While food prices remained relatively subdued owing to cheaper fresh produce, energy, communication, and several service sectors experienced larger gains. The headline figure of 3.1% reflects these contrasting movements within the consumer basket. The latest figures also highlight that temporary effects from mobile pricing and higher petroleum costs contributed significantly to South Korea’s annual inflation rate.