South Korea Posts Weakest Consumer Inflation in Nine Months

2025-09-02 01:42:52

(MENAFN) South Korea’s consumer inflation dropped to its lowest level in nine months in August, driven by a sharp, temporary plunge in mobile communication charges, Statistics Korea reported Tuesday.

The country’s Consumer Price Index (CPI) rose 1.7% year-over-year last month, marking the slowest pace since November 2022. This is the third straight month inflation has fallen below the central bank’s mid-term 2% target, following 2.2% in June and 2.1% in July.

The unexpected dip was largely attributed to a one-off move by SK Telecom, South Korea’s largest mobile carrier, which slashed August bills by 50% for over 20 million subscribers. The initiative aimed to prevent customer churn and had a measurable impact on headline inflation.

Public service prices — which include telecom fees — declined 3.6% in August from a year earlier, shaving off 0.42 percentage points from overall inflation.

Meanwhile, food prices climbed as extreme summer heat pushed up costs across the agricultural sector. Prices for agricultural, livestock, and fishery products surged 4.8% in August, up from 2.1% in July. Agricultural goods rose 2.7% after a slight 0.1% dip the month before, while livestock and fishery prices both jumped over 7%.

Notably, prices for mackerel, peach, and glutinous rice soared in double digits. Other staples like pork, beef, egg, and rice also saw modest gains. However, some produce saw relief: prices for pear, carrot, lettuce, white radish, and zucchini plunged in double digits, with apple and grape prices falling more moderately.

Industrial product prices — including oil and processed foods — increased 1.7%, slightly above July’s 1.6%. Oil prices remained subdued, dropping 1.2% amid cheaper crude, with gasoline down 2.0% and kerosene down 3.8%.

Processed foods, however, rose sharply by 4.2%, contributing 0.36 percentage points to overall inflation. Coffee, ham, and bacon posted double-digit increases, while bread saw smaller hikes.

Utility prices for electricity, natural gas, and tap water edged up just 0.3%, down from 2.7% growth in July.

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