The government has said that the sluggishness of the domestic economy has continued into a third month on the back of stagnation in the semiconductor industry.

In its monthly assessment report on Friday, the finance ministry again made mention of an economic slowdown that has appeared since its January report, while also noting for the first time that the stagnation is driven by the local manufacturing sector.

An official from the ministry was quoted as saying that the chip industry is the key factor in the recovery of the nation's exports and overall economy.

Outbound shipments in March dropped 13-point-six percent on-year amid the lethargic movement of information technology products, including semiconductors and displays.

Domestic consumption, meanwhile, was assessed to be on a track to recovery following the lifting of quarantine rules.

While the local financial market remained stable as concerns over the U.S. banking crisis eased, the ministry said uncertainties persist over the financial instability sparked by monetary tightening moves and the protracted war in Ukraine.