Seoul: South Korea's consumer prices saw an increase of 3.1 percent in August compared to the previous year, fueled by elevated oil prices and higher mobile service subscription charges. This rise is attributed to a low base effect from significant discounts offered last year following a hacking incident, as shown by recent data.
According to Yonhap News Agency, the Ministry of Data and Statistics reported that consumer price growth surpassed 3 percent in August, marking an acceleration from the 2.8 percent on-year increase observed in July. The consumer price rise was recorded at 3.1 percent and 3.2 percent in May and June, respectively.
The surge in consumer prices coincides with a 14.2 percent on-year increase in oil prices for August, although the growth rate decelerated from the 15.6 percent posted in July. Oil prices contributed 0.54 percentage point to the on-year consumer price growth in August, a slight decrease from the 0.6 percentage point contribution in July. Notably, diesel prices surged by 19.6 percent, while gasoline prices increased by 11.5 percent, highlighting South Korea's dependence on energy imports.
An additional factor driving the increase was a significant 26.7 percent rise in mobile phone service charges. This reflects a low base from the previous year when SK Telecom Co. implemented large-scale discounts following a data breach. The ministry indicated that without the impact of mobile bill-related factors, the consumer price hike for August would have been estimated at 2.5 percent.
Core inflation, excluding volatile food and energy prices, rose by 3.4 percent on-year in August, the highest level since reaching 3.8 percent in May 2023. The report also highlighted a 3.7 percent increase in prices of overall industrial products compared to the previous year.
Conversely, prices of agricultural, livestock, and fishery products fell by 2.6 percent, driven by lower prices of napa cabbage and tomatoes. The data ministry attributed this decrease to government-led discount events and an increased supply of major produce. Meanwhile, prices for imported and domestically produced beef rose by 6.2 percent and 3.3 percent, respectively.
In the service sector, prices increased by 3.7 percent, propelled by higher insurance premiums and overseas package tour prices, which rose by 13.4 percent and 14.9 percent, respectively. Additionally, prices for electricity, gas, and water saw a modest increase of 0.4 percent during this period.