SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation reached 3.1% in August, according to official figures, marking an increase from 2.8% in July and pushing the rate above the 3% mark. Prices also edged up by 0.2% compared to July. The Ministry of Data and Statistics reported that the consumer price index hit 120.05, using 2020 as the base year of 100. The rise was largely attributed to higher fuel and mobile service expenses.
Petroleum product prices saw a 14.2% increase from August 2025, exerting additional pressure on household transportation budgets. Diesel costs surged by 19.6%, while gasoline prices went up by 11.5%. These petroleum products contributed 0.54 percentage points to the annual inflation figure. Overall transportation expenses rose 7.2% year-on-year. The government explained that nationwide fuel price caps helped reduce August’s inflation rate by roughly 0.3 percentage points, partially offsetting the impact of rising energy prices.
Communication expenses also experienced a significant jump, partly due to a low comparison baseline from the previous year. Mobile phone service charges soared by 26.7% from August 2025. SK Telecom had 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 approximately 2.5%. The overall communication category increased by 16.6%, making it one of the largest annual contributors to the consumer price index.
Rising Fuel and Telecom Costs Drive Inflation Higher
Underlying inflationary pressures intensified alongside the overall rate. Excluding food and energy, core prices increased by 3.4% from the previous year, marking the strongest rise since May 2023. Another measure excluding agricultural products and petroleum advanced by 3.1%. The index tracking living essentials, which includes common household items, increased by 3.2%. Within this category, food prices rose by 0.8%, while nonfood prices gained 4.8% over the same period.
Prices for industrial goods and services also experienced broad annual increases. Industrial product prices went up by 3.7%, with service costs rising at the same rate. Costs for electricity, gas, and water increased 0.4% year-on-year. Insurance premiums surged by 13.4%, and overseas package tour costs climbed 14.9%. Restaurant and accommodation expenses grew 2.8%, while recreation and cultural costs went up 4.9%, contributing to the overall rise in service-related spending.
Food Prices Fall Despite Overall Inflation Trends
Prices for agricultural, livestock, and fishery products provided some relief, decreasing 2.6% compared to last year. Fresh food prices dropped 6.7%, primarily due to declines in vegetables and fruit. Specifically, fresh vegetable prices fell by 9.8%, and fresh fruit prices decreased by 10%. Conversely, fresh fish and seafood prices increased by 4.1%. Imported beef prices rose 6.2%, and domestic beef prices gained 3.3% over the same period.
The August data demonstrated that inflation remains uneven across key household expenditure categories. Costs for housing, water, electricity, and fuel rose 1.9% year-on-year. Food prices stayed relatively controlled as fresh produce became cheaper, but energy, communication, and several service sectors experienced larger gains. The 3.1% headline figure reflects these contrasting movements within the consumer basket. Additionally, recent data indicated that temporary mobile pricing effects and increased petroleum costs significantly contributed to South Korea’s annual inflation rate.