The Korea Development Institute lowered this year's economic growth outlook for the country by 0.2 percentage point due to the slower than expected recovery of domestic demand.
The KDI downwardly revised its GDP forecast to 3.7 percent, according to Tuesday's projection. In the latter half of last year it predicted this year's growth would reach 3.9 percent.
The main cause was the tepid growth of domestic demand. The KDI expected consumer spending to grow by 3.8 percent in the first half compared to a year ago. But it grew by just 2.6 percent in the first quarter.
The institute estimates that consumer spending will climb 2.4 percent in the second quarter as consumers refrain from spending in the wake of the ferry disaster off the southwest coast last month.