South Korea's consumer prices grew at the fastest pace in 29 months in March, putting a crimp in the government's efforts to tame soaring inflation, a report showed Friday.

According to the report by Statistics Korea, the country's consumer price index jumped 4.7 percent last month from a year earlier, marking the fastest on-year hike since October 2008 when it rose 4.8 percent.

From the previous month, consumer prices rose 0.5 percent.

Excluding volatile oil and food costs, core inflation prices grew

3.3 percent from a year earlier, up from 3.1 percent tallied for February, the report showed.

The hikes were driven mostly by price increases in oil and agricultural products, which jumped 15.3 percent and 14.9 percent, respectively, from a year earlier, the report showed.

South Korea's consumer prices are closely watched as concerns over inflation are deepening among policymakers and experts fearing that fast price hikes could undercut the nation's economic growth momentum going forward.

Such concerns prompted the government to launch "all-out"

efforts to fight inflation earlier this year. It unveiled diverse measures such as easing import taxes on basic goods, unloading its stockpiles of agricultural products and cracking down on price-rigging in the corporate sector that it fears could lead to a rise in consumer prices.

But it appears to be losing ground in the battle in the face of uncontrollable external factors. Higher crude oil prices are a major cause of concern as they drive up prices of many of manufactured products here in Korea, which imports most of its energy needs.

The drawn-out political unrest in the Middle East and North Africa is clouding the outlook further as it will likely put more upward pressure on oil prices by disrupting the supply of energy, experts said.

South Korea's economy remains on a solid recovery track, and the government forecast that it will grow 5 percent this year with inflation to be stabilized at around 3 percent. However, experts express skepticism that it could be difficult to achieve both targets given the current situations at home and abroad.

Apparently taking heed of such concerns, the government recently shifted its policy priority from growth to price stability.

Last month, the Bank of Korea (BOK), the nation's central bank, joined the anti-inflation drive by raising its key interest rate by a quarter percentage point to 3 percent. That marked the fourth rate hike since July last year from a record low of 2 percent.

Experts expect that the BOK might raise the borrowing cost several more times this year in line with its stepped-up efforts to ease mounting inflationary pressure. The bank will hold a rate-setting meeting on April 12.

(Yonhap News)