A state-run institute assessed that the sharp downturn in the local economy has started to stabilize due to recovery in domestic consumption.

According to the Korea Development Institute(KDI) on Monday, the signs of stabilization come despite the decline in exports continuing at a significant pace.

Stagnation in retail sales and the service sector eased due to an increase in auto sales and renewed demand for travel. Auto sales jumped 14-point-five percent on-year in March, while accommodation and food services rose 18-point-two percent.

The KDI, however, said a slowdown in manufacturing centered around the semiconductor and electronics industries persisted, with overall industrial production expansion in March slowing to two-point-two percent, compared to three-point-three percent the previous month.

Outbound shipments further shrank by 14-point-two percent in April, with the information and communication technology(ICT) sector leading the losses by a 42-point-five-percent drop.

Due to an expanded decline in energy imports, however, the country posted a trade deficit of two-point-62 billion U.S. dollars in April, compared to four-point-63 billion dollars in March.