Seoul: South Korea's consumer prices increased by 2.8 percent in July compared to the previous year, attributed to sustained high oil prices, although the pace of increase has decelerated. This marks the first time in three months that inflation has dipped below the 3 percent threshold.

According to Yonhap News Agency, data from the Ministry of Data and Statistics indicated a slowdown from the 3.1 percent and 3.2 percent on-year rises recorded in May and June, respectively. The report highlighted that consumer price growth appeared to slow in July amid signs of stabilization in oil prices, which, while still significantly high, showed a deceleration when compared to 2025 levels.

The findings revealed that oil product prices climbed by 15.5 percent year-on-year in July, a decrease from the 24.7 percent increase observed in June. Oil prices contributed 0.6 percentage points to the overall consumer price growth in July, as opposed to 0.93 percentage points in June. Notably, diesel and gasoline prices remained elevated, with increases of 21.5 percent and 12.6 percent, respectively.

Additionally, the report detailed a 3.7 percent rise in the prices of overall industrial products from the previous year in July. Agricultural, livestock, and fishery products saw a 0.9 percent increase, driven by higher beef and rice prices. Service prices also rose by 2.6 percent year-on-year, fueled by increased insurance costs.

Core inflation, which strips out the more volatile food and energy prices, advanced by 2.6 percent compared to July of the previous year. This represents the sharpest growth since the 2.8 percent rise recorded in December 2023.