South Korea's vice finance minister on Friday warned of growing inflation risks in the face of rising oil prices and hopes for an economic recovery.

But First Vice Finance Minister Kim Yong-beom said inflation is not likely to sharply rise in the short term as recent price hikes were led by a supply shortage of farm products amid the pandemic.

"Inflation risks linger as global liquidity has increased in the process of responding to the pandemic and inflation expectations have risen amid hikes in oil prices," Kim said at a pan-government meeting on inflation.

"In light of demand-side price pressure from the impact of COVID-19 vaccines, we should not let down our guard against inflation concerns," he noted.

The country's overall inflationary pressure has remained subdued amid the COVID-19 pandemic. But recent hikes in food and oil prices are spawning concerns that inflation may pick up amid an economic slowdown.

Consumer prices grew at the fastest clip in one year in February due mainly to sharp gains in prices of agricultural and livestock products.

Last month, prices of farm, livestock and fisheries products advanced 16.2 percent on-year, the fastest gain in 10 years.

Prices of agricultural products jumped 21.3 percent as the supply of vegetables and fruits was dented by cold weather. Prices of eggs also soared 41.7 percent due to the outbreak of bird flu and demand tied to the Lunar New Year holiday.

Some experts raised concerns about "agflation", inflation sparked by price hikes in farm products.

But the government said the situation does not appear to be worrisome as supply shortage of farm products would ease in the spring and authorities are making policy efforts to stabilize inflation.

"Recent price hikes were led by pressure from the supply side, such as production squeeze of farm products and a rise in prices of petroleum products. Given that the fallout of the pandemic lingers, there seems to be a limited possibility that inflation will sharply rise in the short term," Kim said. (Yonhap)