Seoul: South Korea's consumer prices increased by 3.1 percent in August from the previous year, driven by elevated oil prices and higher mobile service subscription fees. This rise comes as a result of a low base effect from large-scale discounts offered last year following a hacking incident, as indicated by recent data.

According to Yonhap News Agency, data from the Ministry of Data and Statistics, consumer price growth surpassed the 3 percent mark in August, accelerating from a 2.8 percent year-on-year rise in July. The consumer price index had previously recorded increases of 3.1 percent and 3.2 percent in May and June, respectively.

The persistent rise in oil prices, which went up by 14.2 percent on-year in August, although slightly less than the 15.6 percent growth seen in July, played a significant role in this inflation. Oil prices accounted for 0.54 percentage points of the year-on-year consumer price growth in August, a slight decrease from 0.6 percentage points in July. Notably, diesel prices surged by 19.6 percent, while gasoline prices increased by 11.5 percent, reflecting South Korea's heavy reliance on energy imports.

Another contributing factor was a substantial 26.7 percent increase in mobile phone service charges. This was attributed to a low base effect from the previous year when SK Telecom Co. provided significant discounts following a data breach incident. Core inflation, which excludes volatile food and energy prices, rose by 3.4 percent on-year in August, marking its highest level since May 2023, when it reached 3.8 percent.

The report also highlighted a 3.7 percent rise in the prices of overall industrial products compared to a year ago in August. In contrast, prices for agricultural, livestock, and fishery products fell by 2.6 percent, mainly due to lower prices of napa cabbage and tomatoes. Meanwhile, prices of 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, driven 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 over the period.