SEOUL, May 23 (Yonhap) -- The South Korean economy is expected to grow at a slower-than-expected pace this year due to flagging exports and domestic demand, a local think tank said Thursday.
The Korea Institute of Finance (KIF) said it has lowered its 2019 growth forecast for Asia's fourth-largest economy to 2.4 percent from the 2.6 percent estimate made in November.
The think tank attributed the downgrade to a global economic slowdown and a subsequent fall in South Korea's overseas shipments.
"The downward revision reflects weakening exports and domestic investment stemming from a downturn in global trade," the KIF said in its latest economic outlook.
The KIF's growth outlook is on par with the Organization for Economic Cooperation and Development's (OECD) recent growth projection of 2.4 percent for South Korea.
According to the think tank, consumer spending is predicted to expand 2.4 percent on-year in 2019, slowing from a 2.8 percent on-year gain the previous year.
South Korea's facility investments are projected to contract 0.3 percent on-year as companies remain reluctant to invest amid an economic slowdown.
Construction investment is forecast to shrink 3.9 percent because of big investments made between 2015 and 2017. Last year, construction investment dropped 4 percent on-year.
South Korea's unemployment rate is estimated to reach 3.6 percent this year, with the number of employed people rising by an average 140,000 per month.
The central bank needs to maintain its soft monetary policy in light of both internal and external conditions, the think tank said, calling for greater fiscal efforts to tackle the economy's poorer-than-expected performance in the first quarter.
The South Korean economy unexpectedly contracted 0.3 percent in the first quarter, the worst performance since the 2008 global financial crisis. Last year, it expanded 2.7 percent, down from a solid 3.1 percent gain the previous year.
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