South Korea's August Inflation Quickens on One-Off Telecom Base Effect
South Korea's headline inflation accelerated further above the central bank's 2% annual target in August, driven largely by a sharp rebound in mobile phone service charges.The consumer price index rose 3.1% year over year in August, quickening from the 2.8% increase in July, according to data released Wednesday. The print came in slightly below the consensus market estimate of 3.2%, tracked by Investing.com.Prices within the communication sector saw the steepest jump across all tracked items, surging 16.6% from the prior year.The spike reflected a 26.7% increase in mobile phone service charges, resulting from the expiration of temporary 50% billing discounts granted in August 2025 following a cyberattack on SK Telecom (KRX:017670).Senior financial official Kang Gi-lyong noted during a government meeting that headline inflation would have stood at about 2.5% excluding the distortion from mobile phone bills, The Korea Herald reported.On a month-over-month basis, consumer prices inched up 0.2%, reversing the 0.2% decline the previous month.Meanwhile, the country's core inflation rate, which excludes food and energy prices, accelerated to 3.4%, the fastest increase since May 2023, from 2.6% in July. Month-over-month core inflation eased to 0.2% from 0.4%.During a meeting to review the latest inflation data, Bank of Korea Deputy Governor Lee Ji-Ho said inflation in September is expected to ease as the impact of the telecom-related base effect subsides."[A] fundamental upward trend is anticipated to continue, centered on core items," the deputy governor said.
