SEJONG, SOUTH KOREA / RankWire.AI / – Petroleum prices increased by 14.2% from August 2025, adding further pressure on household transportation expenses. Diesel costs surged by 19.6%, while gasoline prices saw an 11.5% rise. These petroleum products contributed 0.54 percentage points to the overall inflation rate. Transportation prices as a whole increased by 7.2% year-over-year. The government indicated that nationwide fuel price caps reduced August’s inflation rate by approximately 0.3 percentage points, partly counteracting the effect of rising energy costs.
Meanwhile, communication expenses experienced a notable jump due to a low comparison base from the previous year. Mobile phone service charges soared by 26.7% from August 2025. SK Telecom had offered significant one-month discounts following a data breach during the same period last year. Without the impact of mobile service pricing, the government estimated that annual inflation would have been around 2.5%. Overall, communication costs increased by 16.6%, making this category one of the largest contributors to the annual consumer basket inflation.
Rising fuel and telecom costs drive overall price increases
Price pressures beyond the headline inflation rate also grew stronger. Core inflation, excluding food and energy, went up by 3.4% from a year earlier, marking the strongest rise since May 2023. A different measure that excludes agricultural products and petroleum increased by 3.1%. The index for living essentials, tracking common household purchases, gained 3.2%. Within this measure, food prices rose by 0.8%, while nonfood prices increased by 4.8% compared to the previous year.
Broad increases were also seen in industrial goods and services in August. Industrial product prices climbed by 3.7%, with service prices increasing at the same rate. Costs for electricity, gas, and water rose 0.4% year-over-year. Insurance premiums jumped 13.4%, and overseas package tour prices rose by 14.9%. Prices for restaurants and accommodations went up by 2.8%. Recreation and cultural expenses increased by 4.9%, contributing to the overall rise in service-related costs.
Food prices for fresh produce decline amid overall inflation
During August, prices for agricultural, livestock, and fishery products showed a decrease, providing some relief. This category fell by 2.6% from the same month last year. Fresh food prices experienced a 6.7% drop, mainly due to declines in vegetables and fruits. Vegetable prices decreased by 9.8%, while fresh fruit prices fell by 10%. Conversely, fresh fish and seafood prices moved higher, rising 4.1%. Imported beef prices increased by 6.2%, and domestic beef prices gained 3.3% over the same period.
The August data demonstrated that inflation remained uneven across key household expenditure sectors. Housing, water, electricity, and fuel costs increased by 1.9% compared to the previous year. While the price of fresh produce stayed relatively subdued due to cheaper vegetables and fruits, energy, communication, and several service sectors experienced larger increases. The 3.1% headline inflation rate reflected these contrasting trends within the consumer basket. Additionally, the data highlighted that temporary effects from mobile pricing and rising petroleum costs significantly contributed to South Korea’s annual inflation rate.