SEOUL, Jan. 8 (Xinhua) -- South Korean economy is facing various risk factors at home and abroad such as the debt limit negotiation in the United States, delayed recovery in Europe, sluggishness in local corporate investment and growing volatility in the dollar/won exchange rate, the Finance Ministry said Tuesday. "Despite the fiscal cliff deal in the U.S., uncertainties remain in the global economy such as the negotiation on the debt limit in the U.S. and the delayed economic recovery in Europe,"the Ministry of Strategy and Finance said in a so-called Green Book, the monthly report assessing the nation's economic conditions.
On the domestic front, sluggish corporate investment and higher volatilities in the dollar/won exchange rate remained as destabilizing factors for the local economy, the ministry cautioned.
It was the first time since October 2010 that the ministry pointed out the dollar/won exchange rate in the report, indicating the serious recognition of the South Korean government over the continued appreciation of the local currency against the U.S. dollar.
The South Korean won appreciated 7.58 percent versus the greenback in 2012, raising concerns that the export-driven economy may face slower growth in 2013 due to weak exports.
The Finance Ministry slashed its 2013 growth outlook for the country from 4 percent to 3 percent. The figure was lower than 3.2 percent estimated by Bank of Korea and 3.1 percent by the Organization for Economic Cooperation and Development.
Meanwhile, the ministry cautioned over sluggish corporate investment."Our economy saw stable consumer prices recently. Major economic indicators related to production and consumption improved more or less. But job creation slowed and corporate investment continued to weaken,"the ministry said.
The country's consumer price inflation reduced to 1.4 percent in December due to a decrease in oil product prices that offset a rise in farm goods prices stemming from cold weather.
Output in the mining and manufacturing sectors increased 2.3 percent in November from a month earlier, and the service industry production expanded 0.8 percent. Retail sales grew 2.3 percent over the same period.
However, facility investment declined 0.3 percent in November from a month before. The country added 353,000 jobs in November, but the job growth slowed for two straight months. Exports, which account for more than half of the economy, sank 5.5 percent in December from a year before.