SEOUL (AFP) — South Korea’s inflation hit a 29-month high in March as exports hit a new record, according to data released Friday that raised the prospect of further interest rate rises.

The consumer price index rose 4.7 percent from March 2010, accelerating from the previous month’s 4.5 percent increase. It was the highest figure since 4.8 percent in October 2008, Statistics Korea said.
Month-on-month, the index rose 0.5 percent following a 0.8 percent increase in February.
Core inflation, which excludes energy and food prices, was 3.3 percent year-on-year and 0.3 percent month-on month, compared with 3.1 percent and 0.7 percent in February.
The government has made the battle against inflation its top economic priority and last month the central bank raised the key interest rate for the second time this year, by 25 basis points to 3.0 percent.
Analysts said authorities may also be more willing to accept a stronger won to limit the rise in imported price pressures.
On Thursday the currency hit its highest level in two-and-a-half years against the dollar, triggering central bank intervention to stem the gains.
Underlining the strength of the economy, preliminary figures showed exports in March rose 30.3 percent from a year earlier to $48.6 billion, the largest-ever monthly total.
Imports rose 27.9 percent to $45.49 billion, meaning the March trade surplus rose to $3.1 billion from $2.46 billion the preceding month.
It was the 14th straight month that the country has posted a trade surplus.
Vice Finance Minister Yim Jong-Yong acknowledged that the price situation remains “very tough”, Yonhap news agency reported.
“We expect that inflationary pressure will likely ease as the supply of agricultural products will stabilise after April as the outbreak of foot-and-mouth disease subsides,” he said.
The ministry in a statement also expressed hope price pressures would ease this month but said uncertainty over global oil prices remains.