SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation accelerated to 3.1% in August from a year earlier, official data showed. The rate increased from 2.8% in July and moved back above 3%. Consumer prices also rose 0.2% from the previous month. The Ministry of Data and Statistics said the consumer price index reached 120.05, based on a 2020 benchmark of 100. Higher fuel and mobile service costs drove much of the annual increase.
Petroleum product prices surged 14.2% from August 2025, exerting additional pressure on household transportation expenses. Diesel prices rose 19.6%, while gasoline prices went up 11.5%. Petroleum products contributed 0.54 percentage point to the annual inflation rate. Overall transportation costs increased 7.2% compared to the previous year. The government indicated that nationwide fuel price caps lowered August inflation by roughly 0.3 percentage point, partially offsetting the impact of rising energy prices.
Communication expenses experienced a sharp increase, largely due to a low comparison base from last year. Mobile phone service charges jumped 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 costs increased by 16.6%, making this one of the largest yearly gains within the consumer basket.
Rising fuel and telecom costs contribute significantly to inflation
Underlying inflationary pressures grew alongside the overall headline figure. Prices excluding food and energy increased 3.4% from a year earlier, marking the strongest rise since May 2023. Another indicator that excludes agricultural products and petroleum advanced by 3.1%. The living essentials price index, which tracks items typically purchased by households, rose 3.2%. Within this measure, food prices increased by 0.8%, while nonfood costs gained 4.8% over the same period.
Broad increases were also seen in industrial goods and services in August. Industrial product prices climbed 3.7%, with service costs rising by the same percentage. Costs for electricity, gas, and water increased 0.4% year-on-year. Insurance premiums surged 13.4%, and overseas package tour prices rose 14.9%. Restaurant and lodging expenses increased 2.8%. Costs related to recreation and culture went up 4.9%, contributing to the overall rise in service-related expenditures.
Food prices decrease despite overall inflation climbing
Prices for agricultural, livestock, and fishery products showed some decline during the month. This category fell 2.6% compared to the previous year. Fresh food prices, mainly vegetables and fruit, dropped 6.7%. Specifically, fresh vegetable prices declined 9.8%, and fresh fruit prices fell 10%. Conversely, prices for fresh fish and seafood increased 4.1%. Imported beef prices rose 6.2%, while domestic beef prices grew 3.3% over the same period.
The August data revealed uneven inflation trends across key household spending sectors. Costs for housing, water, electricity, and fuel increased 1.9% from a year earlier. Food prices remained relatively stable as fresh produce became cheaper, but energy, communication, and several service categories experienced more substantial gains. The 3.1% headline inflation rate reflected these contrasting shifts within the consumer basket. The latest figures also indicated that temporary mobile pricing effects and higher petroleum costs played a significant role in South Korea’s annual inflation increase.