The Organization for Economic Cooperation and Development(OECD) has slashed this year's growth outlook for South Korea to two-point-seven percent from three percent.

In its interim economic outlook released Thursday, the OECD also downgraded its growth outlook for Asia's fourth-largest economy for next year to two-point-eight percent from three percent.

The U.S.-China trade war and volatile financial conditions in emerging markets are believed to be the main causes of the downward revision.

The OECD report said that South Korea's domestic demand remains solid in spite of external uncertainties, calling for an expansionary fiscal policy to increase household income and consumption.