The government says that South Korea's economy has been showing signs of recovery with improvements in domestic demand. 

The Ministry of Economy and Finance on Friday presented the assessment in its monthly economic report, known as the "Green Book," for August. 

The ministry said that the economy is continuing a recovery trend on the back of strong exports, manufacturing gains and facility investment, while showing signs of a gradual recovery in domestic demand.

The ministry used the expression “signs of recovery in domestic demand” for four straight months since May. 

However, the government’s assessment was in sharp contrast to that by the Korea Development Institute, which slashed the nation's growth outlook for this year from two-point-six percent to two-point-five percent last week, citing sluggish domestic demand.

In fact, the South Korean economy contracted zero-point-two percent in the second quarter due to slow investment and private consumption.