August Consumer Prices Up 3.1%... Core Inflation Hits 3-Year, 3-Month High (Comprehensive)

Trends in Consumer Prices for August by the Ministry of Data and Statistics
Base Effect from Mobile Phone Charges Drives Inflation

The consumer price inflation rate for August climbed back to the 3% range in just two months, reaching 3.1%. While the upward trend in oil prices caused by the Middle East war slowed and prices of agricultural, livestock, and fishery products also fell, the base effect from last year’s reduction in mobile phone charges played a significant role. Notably, the core inflation rate, which excludes highly volatile food and energy prices, expanded to 3.4%—the highest level in three years and three months.

According to the “Trends in Consumer Prices for August 2026” released by the Ministry of Data and Statistics on September 2, last month’s consumer price index stood at 120.05, up 3.1% year-on-year. The inflation rate had risen due to the shock from the Middle East war, increasing from 2.6% in April to 3.1% in May and 3.2% in June, before slowing to 2.8% in July. However, within just one month, it has once again surpassed the 3% mark.

Customers are shopping at Hanaro Mart Yangjae branch in Seocho-gu, Seoul, on the 10th, as prices of some agricultural products such as spinach and cucumbers have surged amid the ongoing severe heatwave. According to the Korea Agro-Fisheries & Food Trade Corporation, the retail price of spinach is 1,978 won per 100g, up 152.3% from 784 won a month ago, while the retail price of cucumbers has risen 54.8% from 5,369 won to 8,313 won for 10 pieces. August 10, 2026. Photo by Kang Jin-hyung

Base Effect from Mobile Phone Charges Drives Inflation

The base effect from communication charges was the dominant factor driving up inflation this month. Communication prices rose 16.6% year-on-year, marking the highest figure since statistics began in 1985. The contribution of communication prices to overall inflation was 0.63 percentage points. In particular, mobile phone charges soared 26.7%, leading the rise in communication prices. This is attributable to SK Telecom’s 50% reduction of communication fees for all subscribers in August last year as compensation for a personal data leak, which temporarily lowered mobile fees.As the drop in prices from August last year has now disappeared from the base comparison, this has resulted in a high year-on-year increase reflected in August this year. Lee Dowoon, Director General for Economic Trends at the Ministry of Data and Statistics, stated, “The base effect from the reduction in mobile phone charges accounts for about 0.58 percentage points; without this, this month’s consumer price inflation would appear to be around 2.5%.”

The impact of communication charges was even more pronounced in the core inflation rate. Core inflation, which excludes food and energy, rose 3.4% from a year earlier, marking the highest increase in three years and three months since May 2023 (3.8%). The index excluding agricultural products and petroleum products—a core inflation measure specific to Korea—also rose 3.1% year-on-year. This is 0.6 percentage points higher than July’s 2.5% and is the highest since December 2023 (3.1%), after two years and eight months.

Core inflation is an indicator that shows the “fundamental strength” of inflation by excluding items whose prices fluctuate sharply due to seasonal factors or external shocks such as international oil price changes. Components of core inflation, such as dining out, personal services, rent, and processed foods, have downward rigidity—meaning that once their prices go up, they rarely come down. The Ministry of Data and Statistics explained that the base effect from the reduction of mobile phone charges had a greater weight in core inflation than in the overall consumer price index, thus amplifying the increase.

However, even if core inflation was greatly affected by the base effect, it’s difficult to conclude that the actual burden on consumers has decreased. The living necessities price index, which covers frequently purchased items with high spending weight, rose 3.2% from a year ago. In particular, living necessities excluding food jumped 4.8%, significantly outpacing the overall inflation rate. Upward pressure on food prices also persisted. Processed foods rose 0.7% month-on-month, with staple items such as bread (3.0%), snack foods (3.2%), noodles (12.1%), and cereals (14.9%) all experiencing substantial price hikes in just one month. Compared to a year ago, processed food prices are up 1.5%. With the continued rise in prices closely related to daily life—such as processed foods and dining out—the price burden felt by households remains high.

Agricultural, Livestock, and Fishery Prices Fall 2.6%...Vegetable Prices Rise 12.4% in One Month

Prices of agricultural, livestock, and fishery products fell 2.6% year-on-year, mainly due to a 6.7% decline in agricultural goods. However, prices of livestock and fishery products rose by 1.5% and 3.8%, respectively. Fruit prices fell more sharply due to increased shipments and promotional discounts. Compared to a year ago, apple prices dropped 8.9%, napa cabbage prices declined 26.2%, and tomato prices fell 24.8%.

However, vegetable prices rose 12.4% month-on-month, due to weather conditions during the summer and reduced shipments. Prices for napa cabbage increased 37.0%, spinach 68.2%, chives 64.7%, young radish 52.4%, cucumber 40.4%, and lettuce 28.4%. The fresh food index fell 6.7% year-on-year, with fresh vegetables and fresh fruits falling 9.8% and 10.0%, respectively. However, compared to the previous month, the fresh food index rose 3.0%, and fresh vegetables climbed 12.5%. Director General Lee analyzed, “Decreased shipments due to higher summer temperatures, as well as pest damage, rising demand during vacation season, and rising management costs all contributed to these trends.”

Transportation prices rose 7.2% year-on-year, although the rate of increase slowed compared to July (7.7%). While international airfares, reflecting higher global oil prices, remained high, the pace of gasoline price increases slowed, lessening transportation price growth. Personal services increased 3.5%. Insurance service fees increased by 13.4%, package overseas travel costs by 14.9%, apartment maintenance fees by 3.3%, and automobile repair costs by 6.3%. Dining out prices rose 2.7%, while service prices excluding dining out increased 4.0%.

The government stated, “We will faithfully implement Chuseok holiday livelihood stabilization measures, including stabilizing oil prices through the management of maximum petroleum prices and supporting discounts for agricultural, livestock, and fishery products, as well as expanding supply of key holiday goods for price stability of shopping baskets during the holiday period.”

This content was produced with the assistance of AI translation services.