The state-run Korea Development Institute(KDI) assessed that economic stagnation is gradually easing, particularly in semiconductors, amid lingering external uncertainties over U.S. monetary austerity and soaring oil prices.

In a monthly report on Wednesday, the think tank said the contraction in exports is lessening across a majority of items, along with a partial rebound in semiconductor production, with the drop in overall shipments shrinking to four-point-four percent on-year in September.

In August, the production of semiconductors jumped eight-point-three percent on-year on the back of rising demand for high-performance chips, such as those for artificial intelligence servers.

The report also mentioned an eased slump in the manufacturing sector, citing a return to growth of one-point-five percent on-year for all industrial production and the average operation rate in manufacturing surging 73-point-four percent in August.

The KDI said multiple external uncertainties persist as the U.S. and other major economies maintain an aggressive monetary tightening policy while rising oil prices driving up inflation.

The report did not reflect the war between Israel and Palestine's Hamas militant group.