SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer prices increased by 3.1% compared to the same month last year, according to official statistics. This upward movement marked a faster pace than July’s 2.8%, pushing the headline inflation rate above 3%. The consumer price index hit 120.05, with 2020 serving as the baseline index of 100. Additionally, prices grew by 0.2% from July. The Ministry of Data and Statistics announced the August figures on September 2.
A significant factor contributing to this inflationary trend was fuel costs, which remained a primary source of upward pressure during the month. Petroleum product prices increased 14.2% year-over-year, although this rate of growth slowed compared to July. Diesel prices surged by 19.6%, while gasoline prices saw an 11.5% rise. The contribution of petroleum products added 0.54 percentage points to the overall annual consumer price growth. Since South Korea heavily depends on imported energy, domestic fuel prices are notably sensitive to fluctuations in global energy markets.
The cost of mobile phone services also experienced a significant annual jump, with prices increasing 26.7% from August 2025, largely due to an unusually low comparison base. Last year, SK Telecom had offered substantial discounts for one month following a data breach incident. Government estimates indicated that without the impact of mobile service prices, the headline inflation would have hovered around 2.5%. As a result, this temporary comparison factor played a key role in explaining a large part of the year-over-year increase observed in August.
Rising fuel and mobile expenses drive up headline inflation
Core inflation, which excludes volatile food and energy prices, also gained momentum in August, reaching an annual increase of 3.4%, marking the strongest core reading since May 2023. The index that omits agricultural products and petroleum rose by 3.1% over the same period. Meanwhile, the index measuring living essentials grew by 3.2%, with food prices up 0.8% and nonfood items climbing 4.8%.
Broader price data reflected increases across various industrial goods and services sectors, with industrial product prices rising 3.7% compared to the previous year. Service costs also increased by 3.7%, while utility costs—specifically electricity, gas, and water—inched up by 0.4%. Insurance premiums saw a notable rise of 13.4%, and overseas package tour prices increased 14.9%, further contributing to the overall escalation in service-related expenses during the month.
Food prices decline as service costs continue to rise
In contrast, prices for agricultural, livestock, and fishery products moved downward, decreasing by 2.6% from the previous year, mainly due to lower prices for vegetables and fruits. Fresh food prices fell by 6.7% annually, with fresh vegetables experiencing a 9.8% decline. Fresh fruit prices also dropped by 10%, whereas fresh fish and seafood prices increased by 4.1%. Imported beef prices rose by 6.2%, and domestically produced beef costs went up by 3.3%.
The August report highlighted uneven inflation across key household expenditure categories, with transportation costs up 7.2% from the previous year and communication expenses rising 16.6%. Prices for recreation and cultural activities increased by 4.9%, while restaurant and accommodation charges grew by 2.8%. Costs for housing, water, electricity, and fuel edged higher by 1.9%. The government estimated that nationwide fuel price caps reduced August inflation by approximately 0.3 percentage points, partially offsetting the impact of rising petroleum prices.