UPDATE 1-Colombia consumer prices rise 1.21 pct in March

(Adds context, 12-month data)

BOGOTA, April 1 (Reuters) - Colombian inflation was a higher than expected 1.21 percent in March compared with 0.7 percent in the same month last year, the government's National Statistics Department said in a statement on Sunday.

A poll of 32 analysts conducted by Reuters on Tuesday predicted the March 2007 rate would be 0.78 percent.

In 2006, inflation totaled 4.48 percent but it has speeded up since then to 5.78 percent in the 12 months through March, the government's statement said.

Colombia's central bank started periodically raising interest rates almost a year ago in an effort to curtail inflation pressure and hit 2007's target of 3.5 percent to 4.5 percent.

The Andean country's overnight interest rate is now 8.25 percent and expected to keep climbing.

The jump in March inflation was driven by higher food, education and healthcare prices, the government said in the statement.

Gross domestic product grew by 6.8 percent last year in its healthiest expansion since 1978, driven by foreign investment, privatizations, high consumer borrowing, a construction boom and strong prices fetched by oil and coal exports.

Confidence is up thanks in part to President Alvaro Uribe's U.S-backed crackdown on drug-running leftist rebels fighting a four-decade-old insurgency.

Colombia's urban unemployment rate dipped to 12.8 percent percent in February compared with 14.2 percent in the same month last year and 14.4 percent in January of 2007, the government said late on Friday.

The figures measures joblessness in Colombia's 13 largest cities.