SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation surged to 3.1% in August compared to the previous year, according to official figures. The rate moved up from 2.8% in July, crossing the 3% threshold again, with consumer prices also increasing by 0.2% from July. The Ministry of Data and Statistics reported that the consumer price index reached 120.05, based on a 2020 reference point of 100. A significant portion of the annual rise was driven by higher fuel and mobile service expenses.
Petroleum product prices increased by 14.2% from August 2025, putting additional pressure on household transportation costs. Diesel prices climbed 19.6%, and gasoline costs rose 11.5%. Petroleum-related goods contributed 0.54 percentage points to the overall inflation rate. The cost of transportation overall grew by 7.2% year-on-year. The government stated that nationwide fuel price caps helped reduce August inflation by roughly 0.3 percentage points, partially offsetting the impact of rising energy costs.
Communication expenses also saw a sharp rise due to a low comparison base from last year. Mobile phone service charges jumped 26.7% from August 2025, following large one-month discounts SK Telecom offered after 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%. Overall, communication prices increased by 16.6%, making this category one of the largest contributors to the annual increase in consumer prices.
Fuel and telecom costs drive upward price pressures
Price pressures underlying the headline inflation rate gained strength, with core prices excluding food and energy rising 3.4% from a year earlier—the strongest increase since May 2023. Another measure, excluding agricultural products and petroleum, increased by 3.1%. The index tracking essential living expenses, which reflects typical household purchases, rose 3.2%, with food prices climbing 0.8% and nonfood prices increasing 4.8% over the year.
Broad monthly increases were also seen in industrial goods and services. Industrial product prices grew by 3.7%, with service costs rising equally. Electricity, gas, and water prices increased 0.4% year-on-year, while insurance premiums surged 13.4%. Overseas package tour prices went up 14.9%, and restaurant and accommodation costs increased by 2.8%. Costs for recreation and culture climbed 4.9%, contributing to the overall rise in service-related expenses.
Decline in fresh food prices amid overall inflation
Prices for agricultural, livestock, and fishery products offered some relief, falling 2.6% compared to last year. Fresh food costs decreased by 6.7%, mainly driven by declines in vegetables and fruit. Fresh vegetable prices dropped 9.8%, and fresh fruit prices fell 10%, while fresh fish and seafood prices rose 4.1%. Imported beef prices increased by 6.2%, with domestic beef prices gaining 3.3% over the same period.
The August inflation figures revealed uneven price movements across major household expenditure categories. Housing, water, electricity, and fuel expenses increased 1.9% year-on-year. Meanwhile, food prices remained relatively subdued as fresh produce became cheaper, whereas energy, communication, and several service sectors experienced larger gains. The 3.1% headline inflation rate reflected these contrasting trends within the consumer basket. The latest data also indicated that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation increase.