SEOUL, Oct. 9 (UPI) -- South Korea's economy, burdened by the global economic slowdown and domestic issues, faces high uncertainty, the finance ministry said Tuesday.
"At a time when worries over a global slowdown are lingering, the recoveries of consumption and investment sentiment are also being delayed," the ministry said in a report by the Yonhap News agency.
"Uncertainty over economic situations here and overseas remain high."
While employment conditions continue to improve and consumer price growth has remained stable, the report said indicators such as production, consumption and investment appeared to be losing traction.
Industrial output declined 0.7 percent in August from the previous month, affected by labor strikes in the auto industry, and retail sales contracted 3 percent over the same period, Yonhap said.
The report said the eurozone debt crisis is a major factor affecting the South Korea's export-driven economy with the latest data indicating overseas shipments declined 1.8 percent in September from the same month a year earlier.
The International Monetary Fund has cut its growth forecast for South Korea this year to 2.7 percent from its forecast of 3 percent and also cut forecast for next year to 3.6 percent from the previous 3.9 percent.
The South Korean government, however, has maintained its forecast of 3.3 percent growth this year and 4 percent next year but Yonhap quoted analysts that the numbers may be overly optimistic given economic situations.