Retail sales of car fuels like gasoline and LPG saw a near 20 percent jump in March. Spending also soared on cosmetics, personal health items and new cars.

The upward trend comes as little surprise given the price hikes in global oil and raw materials. Still, it casts a dark cloud over future prices, given high liquidity in the nation's market as reported by the Bank of Korea for the same month.

Some experts point to the possibility of high liquidity pushing prices even higher. Others, however, suggest one factor that could counter the price increases for a while.

Chang Jae-chul, a research fellow at the Samsung Economic Research Institute, said, "While there is concern over inflation given high liquidity, falling domestic consumption is reducing inflationary pressure. The two factors counteract each other."

Yet despite numerous measures unrolled or in the works by the new pro-business Lee Myung-bak administration, prices everywhere from the corner grocery to major department stores continue to climb.

"Price hikes this time around are being propelled by price increases from abroad and that's why the government doesn't have any effective measure at this point other than tariff discounts," Chang said.

Experts are saying that inflationary pressure in the country is likely to continue if conditions abroad do not improve.

But there's one glimmer of hope for the new government eager to see its inflation-fighting measures bear fruit, as raw material prices are expected to simmer down in the latter part of this year.

Arirang News