The government says the nation’s economy will lose steam next year, with growth slowing to one-point-six, bogged down by a global recession.

The official 2023 economic policy direction released on Wednesday outlined the dismal economic outlook by the government.

The document said sluggish trade and high interest rates will impede recovery next year, in areas such as exports and domestic demand.

First vice finance minister Bang Ki-sun noted challenges at home and abroad for Asia’s fourth largest economy, with growth sharply decelerating in the first half of the year.

He said a slowdown in the real economy including exports is more pronounced due to a sluggish global market and a stagnant semiconductor sector, adding that the economic climate will gradually improve toward the second half of next year.

The government, meanwhile, expects that inflation next year will stand at three-point-five percent.