SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation increased to 3.1% in August compared to the same month last year, according to official figures. The inflation rate rose from 2.8% in July, surpassing the 3% mark once again. Consumer prices also experienced a 0.2% rise from the previous month. The Ministry of Data and Statistics reported that the consumer price index reached 120.05, based on a 2020 benchmark of 100. A significant portion of the yearly increase was driven by higher fuel and mobile service prices.
Petroleum product prices rose by 14.2% from August 2025, adding upward pressure on household transportation expenses. Diesel prices went up by 19.6%, while gasoline costs increased by 11.5%. Petroleum-related items contributed 0.54 percentage points to the overall inflation rate for the year. Overall transportation costs climbed 7.2% compared to the previous year. The government stated that nationwide fuel price caps helped reduce August’s inflation by approximately 0.3 percentage points, partly offsetting the impact of rising energy prices.
Communication expenses also saw a sharp increase 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 large 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 around 2.5%. The overall cost of communication services rose by 16.6%, making it one of the categories with the largest annual increases in the consumer basket.
Rising Fuel and Telecom Costs Drive Up Inflation
Underlying inflationary pressures grew alongside the headline figure. Core prices, excluding food and energy, increased by 3.4% year-over-year, marking the strongest rise since May 2023. Another indicator that excludes agricultural products and petroleum advanced by 3.1%. The index tracking household essentials, which includes commonly purchased items, rose by 3.2%. Within this index, food prices increased by 0.8%, while nonfood prices climbed by 4.8% compared to a year earlier.
Prices for industrial goods and services also saw broad increases in August. Industrial product prices went up by 3.7%, with service costs rising at the same rate. Electricity, gas, and water expenses increased by 0.4% from the previous year. Insurance premiums jumped by 13.4%, and overseas package tour prices rose by 14.9%. Restaurant and accommodation prices increased by 2.8%, while recreation and culture costs grew by 4.9%, contributing to the overall rise in service-related expenses.
Food Prices Decline Despite Overall Inflation Trends
In contrast, prices for agricultural, livestock, and fishery products provided some relief during the month, falling by 2.6% from a year earlier. Fresh food prices dropped notably by 6.7%, mainly due to declines in vegetables and fruits. Fresh vegetable prices decreased by 9.8%, and fresh fruit prices fell by 10%. Conversely, fresh fish and seafood prices increased by 4.1%. Imported beef prices rose by 6.2%, while domestic beef prices gained 3.3% over the same period.
The August data indicated that inflation varied across different household expenditure categories. Costs related to housing, water, electricity, and fuel increased by 1.9% compared to the previous year. Food prices remained relatively restrained as fresh produce became cheaper, whereas energy, communication, and several service sectors experienced larger increases. The headline rate of 3.1% reflected these contrasting shifts within the consumer basket. The latest figures also highlighted that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation rate.