The state-run Korea Development Institute brought down the economic growth forecast for 2024 to 2.2 percent and 1.4 percent in 2023, slashing 0.1 percentage point each from the previous projection made in August, citing a slowdown in private consumption stemming from high rates.

The local economy will show gradual recovery backed by exports next year, yet the pace will be limited due to the slowdown in domestic consumption due to persistently high rates, making it grow by 2.2 percent on-year, according to a forecast released by the think tank Thursday.

It is the same as the projection made by the Bank of Korea and the International Monetary Fund, lower than the government’s 2.4 percent. It is slightly higher than the Organization for Economic Co-operation and Development’s projection at 2.1 percent.

The yearly increase in the growth rate is due to the base effect of the slump in the economy from this year. Though the Korean economy has recently been showing signs of picking up its pace, the recovery will be slow as private consumption and equipment investment will be limited.

The KDI is forecasting 2.3 percent growth in the first half and 2 percent in the second half for next year.

The think tank projected this year’s growth rate will stand at 1.4 percent. This is the same as that of the government, central bank and the IMF’s.