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 figures. The increase follows a 2.8% rise in July, pushing the inflation rate back above 3%. Consumer prices also saw a monthly gain of 0.2%. The Ministry of Data and Statistics reported that the consumer price index reached 120.05, using 2020 as the base year of 100. The surge was largely fueled by higher costs for fuel and mobile telecommunications services.
Petroleum prices increased by 14.2% from August 2025, putting additional pressure on household transportation expenses. Diesel prices experienced a 19.6% rise, while gasoline costs grew by 11.5%. Petroleum products contributed 0.54 percentage points to the annual inflation rate. Overall transportation costs jumped 7.2% year-on-year. The government stated that nationwide fuel price caps helped reduce August inflation by approximately 0.3 percentage points, somewhat counteracting the impact of rising energy prices.
Communication expenses also saw a sharp increase, partly due to a low comparison base from the previous year. Mobile phone service charges surged by 26.7% from August 2025. SK Telecom had offered significant one-month discounts following a data breach during the same period last year. Without this mobile service effect, the government estimated that annual inflation would have been around 2.5%. The overall costs for communication services rose by 16.6%, making it one of the categories with the highest yearly increases in the consumer basket.
Rising Fuel and Communication Costs Drive Overall Price Growth
Price pressures underlying the headline inflation rate strengthened further. Core inflation, excluding food and energy, increased by 3.4% from the previous year, marking the strongest rise since May 2023. A separate measure that omits agricultural products and petroleum advanced by 3.1%. The index tracking essential living expenses, which includes items commonly bought by households, increased by 3.2%. Within this index, food prices rose by 0.8%, while nonfood prices grew by 4.8% compared to last year.
In August, prices for industrial goods and services also showed broad annual increases. Industrial product prices went up by 3.7%, matching the 3.7% rise in service costs. Costs for electricity, gas, and water increased by 0.4% year-on-year. Insurance premiums rose sharply by 13.4%, and overseas package tour prices increased by 14.9%. Prices for restaurants and accommodation grew by 2.8%. The recreation and culture sector saw a 4.9% increase, reflecting broader service-related expense growth.
Food Prices Drop Despite Overall Inflation Growth
Prices for agricultural, livestock, and fishery products provided some relief, declining 2.6% from the previous year. Fresh food costs fell 6.7%, driven mainly by decreases in vegetables and fruits. Specifically, fresh vegetable prices declined by 9.8%, and fresh fruit prices dropped by 10%. Conversely, prices for fresh fish and seafood increased by 4.1%. Imported beef prices rose by 6.2%, while domestic beef prices gained 3.3% over the same period.
The August inflation figures revealed uneven price changes across major household spending categories. Costs related to housing, water, electricity, and fuel increased by 1.9% year-on-year. Meanwhile, food prices remained relatively contained, with fresh produce becoming cheaper. However, energy, communication, and several service categories experienced larger gains. The 3.1% headline inflation rate reflects these mixed movements within the consumer basket. The latest data also indicated that temporary effects from mobile pricing and higher petroleum costs contributed significantly to South Korea’s annual inflation rate.