The Korea Development Institute(KDI) halved its growth forecast for the domestic economy this year to zero-point-eight percent, citing ongoing global trade disputes and sluggish exports.

In its revised outlook for 2025, released Wednesday, the state-run economic think tank said the nation’s economy can expect to see a slowdown amid worsening trade conditions sparked by U.S. tariff hikes and growing uncertainties in trade policies.

In its February forecast, the KDI had projected a one-point-six-percent expansion.
 
The KDI said another key factor in the downward revision is an overall slump in exports, with the exception of semiconductors, as the global trade environment has also shrunk.
 
It forecast total export growth of zero-point-three percent this year and a zero-point-four percent decline in commodity exports, in terms of volume.

But it expects economic growth to rebound to one-point-six percent next year.
 
The KDI explained that interest rate cuts, increased private consumption and an uptick in construction orders are factors driving the recovery, but said growth will be limited if trade disputes continue, especially between the U.S. and China.