A state think tank said on Sunday that South Korea's economic sluggishness appears to be easing as the negative effect of the COVID-19 pandemic drops.

The Korea Development Institute (KDI) presented the assessment in its monthly economic trends publication, saying that the economic sluggishness eased in domestic consumption amid a decline in the country's coronavirus cases.

South Korea's daily new virus cases spiked more than 900 in late February, but the number of new infections has since flattened sharply in recent months.

The KDI had assessed the economy was "contracting" for five straight months since March when the coronavirus was spreading in earnest, but it dropped the expression for the first time in six months and said instead the economic sluggishness eased.

The institute, however, added that the positive signs of an economic recovery are growing, but external uncertainties remain persistent.