South Korea's economy will likely grow at a slower pace than the government's forecast next year as exports are expected to lose steam and domestic demand is predicted to plateau due to the global economic downturn, a local think tank said Wednesday.
The Korea Institute of Finance (KIF) said that the Korean economy is forecast to grow 3.7 percent in 2012, slowing from this year's growth estimate of 3.9 percent.
The KIF's growth estimate is lower than the government's estimate. Earlier, the finance ministry projected growth of 4.5 percent or below and 4.8 percent, respectively, in 2011 and 2012.
Delay in economic recovery in developed countries and subsequent slowdowns in emerging markets will likely have a negative impact on the local financial market, where investors have been refraining from taking further risks, the KIF said.