The state-run Korea Development Institute(KDI) has assessed for the fourth consecutive month that downward risks in the domestic economy are escalating.

In a monthly assessment report released Monday, KDI said the nation’s economy is showing signs of increased risks amid the rapid exacerbation of external conditions. 

The institute said industries continued to experience a slump in production and that growth in exports remained sluggish after outbound shipments declined two-point-one percent for the first quarter, despite the three-point-one percent growth posted in March. 

KDI added that business sentiment contracted, mainly among export firms, after external conditions worsened, including changes in U.S. trade policies. 

The institute forecast that such sentiment could further contract once the new U.S. tariffs are in full swing.