ع
South Korea’s consumer price growth reached 3.1 percent in August, above the central bank’s 2 percent target and up from the previous month’s 2.8 percent increase, according to official data. The Ministry of Data and Statistics attributed the acceleration to persistently elevated oil prices and a one-off jump in mobile service charges. This marked the return to the 3 percent range after a brief dip in July, following 3.1 percent in May and 3.2 percent in June.
Data from the ministry showed that petroleum prices advanced 14.2 percent on the year in August, contributing 0.54 percentage points to overall inflation even as the rate of increase slowed from July’s 15.5 percent. Diesel prices climbed 19.6 percent while gasoline rose 11.5 percent, underscoring the country’s dependence on energy imports amid global supply concerns. The finance ministry stated that fuel price caps in place nationwide reduced the headline inflation figure by 0.3 percentage points.
A 26.7 percent surge in mobile phone service fees, caused by a low base from SK Telecom’s 50 percent discounts offered last August after a data breach impacting more than 20 million users, drove public service prices up 6.5 percent. Yonhap News Agency reported that this base effect was a key factor in pushing the overall index higher. Communication prices as a category increased 16.6 percent year on year as a result.
Senior financial official Kang Gi-lyong said in a government meeting that consumer prices would have risen only 2.5 percent without the mobile bill distortion. He noted that the fuel cap system further tempered the increase, with some calculations suggesting the rate could have hit 3.6 percent absent such measures. Core inflation excluding food and energy jumped to 3.4 percent from 2.6 percent, its highest pace since May 2023.
Consumer prices gained 0.2 percent on the month in August, rebounding from a 0.2 percent drop in July but missing forecasts for a 0.3 percent rise. The data emerged days after the Bank of Korea raised interest rates for the second time in successive meetings to address inflation above target and financial risks. Economists polled by Reuters had anticipated a 3.2 percent annual increase.
The finance ministry projected an easing of inflationary pressures in September, though it highlighted ongoing upward risks including geopolitical tensions in the Middle East and weather-related impacts on food supplies. The ministry’s assessment indicated that underlying trends warrant continued vigilance despite policy interventions. Last week’s rate decision by the central bank reflected concerns that inflation could remain sticky in coming months.
