South Korea's consumer prices grew more than 2 percent for the fourth straight month in July on higher prices of farm and oil products, data showed Tuesday, raising expectations that the central bank will hike its key rate within this year.

The consumer prices rose 2.6 percent on-year in July, accelerating from a 2.4 percent on-year gain the previous month, according to the data compiled by Statistics Korea.

The pickup in inflation was due largely to last year's low base and the tight supply of livestock products amid the scorching heat, according to the statistics agency.

Compared with a month earlier, inflation rose 0.2 percent last month, switching from a 0.1 percent on-month decline in June.

Core inflation, which excludes volatile food and oil prices, rose 1.2 percent on-year in July.

The country's price pressure has been growing as the economic recovery accelerates, led by robust exports.

The government said the growth of consumer prices is expected to temporarily surpass the Bank of Korea's inflation target of 2 percent, but annual inflation will remain below it.

"The July inflation rate topped 2 percent, led by price gains in personal services, farm and livestock goods, and oil products," Eo Woon-sun, a senior statistics agency official, told reporters.

The government expected the growth of consumer prices to slow in the third quarter from the second quarter, when inflation grew an average of 2.5 percent.

Last month, prices of agricultural and petroleum products continued to extend their gains, but the growth rates of the prices slowed compared with June.

The price of agricultural, livestock and fisheries products rose 9.6 percent on-year, slowing from a 10.4 percent gain in June. Those of eggs jumped 57 percent even as the country has reported no cases of bird flu since April.

Prices of petroleum products increased 19.7 percent on-year as oil prices remained high amid the global economic recovery.

Home prices grew 1.4 percent last month, marking the 15th straight month of rises and the fastest on-year gain since November 2017. Housing prices extended their gains despite the government's efforts to curb them.

Prices of daily necessities, including food, clothes and housing, rose 3.4 percent on-year in July, the fastest gain in nearly four years.

The government expected inflation to stabilize in the second half, but it also voiced "extra" vigilance against the possibility that upward pressure in consumer prices could build up in the coming months.

"There are upside risks to inflation as weather conditions could worsen due to heat waves and typhoons, and oil prices may further rise. Uncertainty from spiking COVID-19 cases also remains high," the finance ministry said in a statement.

Finance Minister Hong Nam-ki on Monday stressed the need to stabilize prices as demand for farm products and other foodstuff will increase ahead of the Chuseok fall harvest holiday set for September.

The Bank of Korea (BOK) revised up its 2021 inflation outlook to 1.8 percent from its earlier estimate of 1.3 percent. The finance ministry also forecast consumer prices to grow 1.8 percent this year.

In July, the central bank left its benchmark policy rate unchanged at a record low of 0.5 percent amid the fourth wave of the pandemic. But BOK Gov. Lee Ju-yeol strongly hinted the central bank may hike the rate by the end of this year.

The BOK chief has stressed the need to orderly normalize its monetary policy amid the economic recovery. The BOK slashed the base rate by a combined 0.75 percentage point between March and May 2020 to bolster the pandemic-hit economy.

The government forecast Asia's fourth-largest economy to grow 4.2 percent this year. The BOK expected economic growth of 4 percent. (Yonhap)