SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation grew by 3.1% in August compared to the previous year, according to official figures. The inflation rate moved up from 2.8% in July, crossing back above 3%. Consumer prices also saw a 0.2% increase from July to August. The Ministry of Data and Statistics reported that the consumer price index reached 120.05, using 2020 as the base year of 100. A significant portion of the annual rise was attributed to higher fuel and mobile service expenses.
Petroleum product prices saw a 14.2% increase from August 2025, putting additional pressure on household transportation costs. Diesel prices climbed by 19.6%, while gasoline costs grew by 11.5%. Petroleum products contributed 0.54 percentage points to the overall inflation rate. In August, transportation costs rose 7.2% compared to the previous year. The government stated that nationwide fuel price caps helped reduce the inflation rate by roughly 0.3 percentage points, partly counteracting the impact of rising energy prices.
Communication expenses also experienced a sharp rise, primarily due to a low comparison base from the same period last year. Mobile phone service charges surged 26.7% from August 2025. SK Telecom had offered large one-month discounts following a data breach during that time last year. The government estimated that without this mobile service effect, annual inflation would have been around 2.5%. Overall, communication costs increased by 16.6%, making it one of the categories with the highest annual growth in the consumer basket.
Rising Fuel and Telecom Expenses Contribute Significantly to Price Gains
Price inflation pressures became more evident alongside the headline figure. Core prices, which exclude food and energy, increased by 3.4% from a year earlier. This was the strongest rise since May 2023. An alternative measure, excluding agricultural products and petroleum, rose by 3.1%. The index tracking essential living costs, which includes items commonly bought by households, went up 3.2%. Within this index, food prices increased by 0.8%, while nonfood prices rose by 4.8% compared to the previous year.
Prices for industrial goods and services also saw broad annual increases in August. Industrial product prices increased by 3.7%, with service prices climbing by the same rate. Costs for electricity, gas, and water rose 0.4% year-on-year. Insurance premiums jumped 13.4%, and overseas package tour prices increased by 14.9%. Restaurant and accommodation expenses rose 2.8%. Costs related to recreation and culture went up 4.9%, contributing to the overall increase in service-related expenses.
Despite Overall Inflation, Fresh Food Prices Decline While Other Costs Rise
Prices for agricultural, livestock, and fishery products provided some relief during the month. This category decreased by 2.6% year-on-year. Fresh food prices fell 6.7%, mainly due to declines in vegetables and fruit. Fresh vegetable prices dropped 9.8%, and fresh fruit prices decreased 10%. Conversely, prices for fresh fish and seafood increased by 4.1%. Imported beef prices rose by 6.2%, while domestic beef prices grew 3.3% over the same period.
The August data revealed that inflation remained uneven across different household expenditure categories. Costs for housing, water, electricity, and fuel increased by 1.9%. Food prices remained relatively stable as fresh produce became cheaper. However, energy, communication, and several service sectors experienced larger gains. The 3.1% overall inflation rate reflected these contrasting trends across the consumer basket. The latest figures also indicated that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation rate.