The consumer price index (CPI) stood at 108.62 in August, up 5.7 percent from a year earlier, according to Statistics Korea.
It was down from a 6.3 percent gain in July, marking the first fall in seven months.
The headline inflation has been on the rise this year, with 4.1 percent in March, 4.8 percent in April, 5.4 percent in May, 6.0 percent in June and 6.3 percent in July, respectively.
The lower inflation in August was driven by a slower rise in oil products price that was affected by cheaper crude oil.
Price for industrial products, including oil products, went up 7.0 percent in August from a year earlier, after climbing 8.9 percent in the previous month.
Oil products price was up 19.7 percent in August, after surging 35.1 percent in July. The rising pace of oil products price has hovered above 30 percent for five successive months through July.
Prices for gasoline, diesel and kerosene spiked 8.5 percent, 30.4 percent and 73.4 percent each last month.
The headline inflation still exceeded the Bank of Korea (BOK)'s mid-term target of 2 percent for 17 months in a row.
To counter the still high inflation, the BOK has hiked its policy rate seven times since August last year, including the first-ever 50-basis-point rate increase in July.
The BOK said in a statement after lifting its policy rate by a quarter percentage point to 2.50 percent in August that it would continue the tightening monetary policy as inflationary pressures and inflation expectations remained high.
Inflation expectations, which gauge outlook among consumers over headline inflation for the next 12 months, stood at 4.3 percent in August, after hitting a record high of 4.7 percent in July.
Price for electricity, natural gas and tap water advanced 15.7 percent in August from a year earlier, unchanged from the previous month. It was the fastest growth since relevant data began to be compiled in January 2010.
Processed food price gained 8.4 percent in August, after going up 8.2 percent in the prior month.
The release of the pent-up demand, caused by the lifting of all the anti-COVID-19 measures except an indoor mask mandate, boosted services prices, especially eating-out costs, as well as farm goods prices.
Private services price, including eating-out costs, soared 6.1 percent in August from a year earlier, raising the overall inflation by 1.9 percentage points. It was the highest gain since April 1998.
Expense for dining out jumped 8.8 percent last month, logging the highest in almost 30 years since October 1992. Public services price added 0.8 percent.
Price for agricultural, livestock and fishery products was up 7.0 percent in August on a yearly basis.
Vegetable price picked up 27.9 percent, while those for pork and imported beef soared 3.8 percent and 19.9 percent respectively.
Housing rent, including Jeonse and monthly rent, climbed 1.8 percent in August from a year earlier.
Jeonse is South Korea's unique contract between two households where a landlord grants a two-year residential right to a tenant, who in turn lends a certain amount of money, or deposit, to the landlord.
The livelihood items index, which gauges price for daily necessities, gained 6.8 percent in August from a year earlier, after increasing 7.9 percent in the previous month.
The fresh food index, which measures price for fish, shellfish, fruit and vegetable, picked up 14.9 percent in August, after rising 13.0 percent in the prior month.
Demand-side inflationary pressures mounted on pent-up demand, caused by the lifting of anti-virus measures.
Core consumer price, which excludes volatile agricultural and oil products, was up 4.4 percent in August on a yearly basis.
The OECD-method core price, excluding volatile energy and food costs, climbed 4.0 percent last month.
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