South Korea's consumer prices surge 3.1% in May, highest in 26 months

South Korea's consumer prices rose 3.1% in May from a year earlier, the fastest pace in 26 months, as a surge in global oil prices driven by the Middle East war pushed petroleum product costs up 24.2% and brought energy-led inflation pressure into full force.

The Ministry of Statistics said Tuesday the consumer price index stood at 119.92 (base year 2020=100) in May, up 3.1% from the same month a year ago — the first time the rate has exceeded 3% since March 2024, when it also came in at 3.1%. After holding steady at 2.0% in both January and February this year, inflation accelerated each month: 2.2% in March, 2.6% in April and 3.1% in May.

The increase was driven almost entirely by soaring global oil prices. Petroleum product prices climbed 24.2% year-on-year, adding 0.92 percentage points to overall inflation — the steepest rise since July 2022, when energy costs surged 35.2% in the wake of the Russia-Ukraine war.

By product, gasoline rose 23.1% and diesel 33.3%, both the largest gains since July 2022. Kerosene climbed 21.7%, its biggest increase since February 2023. The oil price surge pushed industrial product prices up 4.2%, contributing 1.40 percentage points to overall inflation.

The ripple effects spread to transportation and travel services. The transportation category posted the highest year-on-year gain among all expenditure categories, rising 11.6%. International airfares soared 33.5%, the steepest increase since the statistics were first compiled in 1995.

Agricultural product prices offered some relief, falling 0.8% from a year earlier, with vegetables down 4.9%. Livestock products rose 5.8%, however, and fishery products 5.0%. Eggs climbed 10.2%, hairtail 15.1% and yellow croaker 14.6%, adding to household grocery bills.

Service prices also remained stubbornly elevated, rising 2.8% year-on-year, while personal services gained 3.7%. Dining out rose 2.6% and personal services excluding dining out climbed 4.4%. Insurance service fees surged 13.4%, overseas group tour costs rose 26.3% and passenger car rental fees rose 25.7%.

The lifestyle price index, which reflects everyday cost-of-living pressures, rose 3.3% year-on-year, with food up 2.1% and non-food items up 4.2%. The OECD-standard core inflation measure — the index excluding food and energy — rose 2.5%, the highest since February 2024. The index excluding agricultural products and petroleum products also gained 2.5%, signaling that inflationary pressure is spreading beyond the energy sector to the broader economy.