South Korea's Finance Ministry on Monday revised down its 2015 growth outlook to 3.8 percent from an earlier forecast of 4 percent due to sour consumer sentiment and economic uncertainties.
The Finance Ministry forecast that the economy would expand 3.4 percent in 2014 before growing 3.8 percent in 2015. The 2015 figure was lower than the ministry's initial estimate.
The South Korean economy is expected to recover next year from weak private consumption caused by the April ferry sinking disaster, but consumer sentiment would remain sour, the ministry said.
The maritime disaster left more than 300 people, two thirds of whom high school students, dead or missing. It also rattled the economy as consumers refrained from entertainment and travel amid a paroxysm of grief spreading in the entire country.
Uncertainties lingered about the U.S. Federal Reserve's monetary policy, which is expected to be normalized from the near- zero policy rate. The Fed said it would be patient in interest rate hikes, seeking to relieve concerns about its policy direction.
The ministry lifted its 2015 outlook for the consumer price inflation to 2 percent after it raised cigarette prices by a whopping 80 percent. Farm goods prices were forecast to push up the headline inflation, but lower global oil prices would ease inflationary pressures, the ministry said.
Global crude oil prices fell below 60 U.S. dollars a barrel after the Organization for Petroleum Exporting Countries (OPEC) refrained from reducing production, boosting worries about supply glut.