The finance ministry has said that while the country is facing a continued slowdown in the economy, downside risks are easing.

In the June edition of the ministry’s green book on economic trends released on Friday, the ministry said that faltering exports and manufacturing are driving the contraction for the fifth consecutive month.

The ministry reported earlier this month that exports in May fell more than 15 percent on-year, continuing a downward trend for the eighth month and resulting in a trade deficit of two-point-one billion dollars.

However, the consistent reduction in the deficit this year led to the deletion of the expression "sluggish exports" in the latest report, with a ministry official citing signs of slow improvement in lackluster indicators.

The government also believes domestic demand is gradually recovering and business confidence is also improving.

While retail sales in April fell one-point-one percent on-year and two-point-three on-month, the consumer sentiment index rose two-point-nine points to reach 98.

Alongside a strong job market, inflation also continues easing with a three-point-three-percent increase logged last month, while a ministry official predicted growth in the two-percent range in the near future.

The government has interpreted the data to indicate that downward risks have eased modestly.