The Korea Development Institute(KDI) has lowered the nation’s economic growth outlook for this year from one-point-eight percent to one-point-five percent.

The state-run think tank disclosed its adjustment in a report released on Thursday.

The institute said South Korea’s economy in the first half saw a sharp slump particularly in the manufacturing sector, but will witness eased stagnation in the second half of the year when considering internal and external economic conditions.

The institute forecast that the nation’s economy will post growth of zero-point-nine percent in the first half and two-point-one percent in the second half. Compared to the institute’s initial projection, the figure for the first half is down point-two percentage points and the figure for the second half is up point-three percentage points. 

The think tank also cited slowing exports as a major reason for the slump in the first half, but it noted recovery in China’s economy and the alleviated slump in the semiconductor industry as factors for improved forecasts for the second half.

As for next year, the institute projected growth of two-point-three percent, saying macroeconomic conditions will return to normal levels at the end of 2024 after inflation stabilizes on the back of a steady economic recovery.