South Korea's consumer prices rose 2.8% in July, inflation below 3% for first time in three months

SEOUL, Aug. 4 (Yonhap) -- South Korea's consumer prices rose 2.8 percent in July from a year earlier as oil prices remained elevated, though their rate of increase slowed, data showed Tuesday, with inflation falling below the 3 percent mark for the first time in three months.

According to data from the Ministry of Data and Statistics, the increase slowed from a 3.1 percent and 3.2 percent on-year rise posted in May and June, respectively.

Consumer price growth apparently slowed in July from a month earlier as oil prices showed signs of stabilization, although they remained significantly high compared with 2025.

The report showed oil product prices rose 15.5 percent from a year earlier in July, remaining elevated but slowing from the 24.7 percent on-year increase posted in June.

Oil prices accounted for 0.6 percentage point of consumer price growth in July, compared with 0.93 percentage point in June.

Diesel and gasoline prices, in particular, remained elevated in July, rising 21.5 percent and 12.6 percent, respectively.

The report showed prices of overall industrial products rose 3.7 percent from a year earlier in July.

Prices of computers and mobile devices rose 25.1 percent and 22.5 percent, respectively, following increases in chip prices.

Prices of agricultural, livestock and fishery products increased 0.9 percent, led by higher beef and rice prices.

Agricultural product prices alone fell 2.2 percent from a year earlier.

"While (prices of agricultural products) normally rise in July and August due to heat waves, the overall production and shipment increased last month," said Lee Doo-won, a senior statistics official.

"The government's promotional events for agricultural and livestock products, which were more extensive than in other months, also contributed to (the July data)," he added.

Service prices moved up 2.6 percent from a year earlier, driven by higher insurance costs, which increased 13.4 percent.

The report showed international airfares and overseas travel packages rose 21.7 percent and 20 percent, respectively.

Core inflation, which excludes volatile food and energy prices, also advanced 2.6 percent compared with July last year, the latest findings showed. It was the sharpest growth since the 2.8 percent growth posted in December 2023.

First Vice Finance Minister Lee Hyoung-il, meanwhile, chaired a meeting on inflation with relevant ministries, saying the slowdown in consumer price growth from the previous month reflected the government's efforts to stabilize prices, which include the price caps on fuel products.

South Korea adopted the price cap system in March in a bid to stabilize domestic fuel prices amid volatility in the global energy market.

In late June, the government decided to lower the price caps on fuel products, citing easing geopolitical tensions in the Middle East.

The finance ministry estimated the latest adjustment in fuel price caps lowered July's consumer price growth by about 0.3 percentage point.

"Despite the slowdown, the burden on people's livelihoods remains high as consumer prices continue to stay elevated due to the cumulative impact of previous price increases," the first vice finance minister said.

Lee called on all ministries to make all-out efforts to address upside risks to inflation, including geopolitical uncertainties in the Middle East and the impact of recent heat waves.