The Korea Development Institute (KDI) has lowered its 2015 growth forecast for South Korea to two-point-six percent.
 
It is zero-point-four percentage points lower than the state-run think tank's outlook in May.
 
The forecast is also lower than the two-point-seven percent growth estimated by the Bank of Korea, the Organization for Economic Cooperation and Development and the International Monetary Fund.
 
The KDI said in its economic forecast report, released Wednesday, that it expects the South Korean economy to grow around three percent next year. However, it noted that if the global economy expands at this year's level of three-point-one percent in 2016, South Korea will only grow two-point-six percent next year.
 
The institute attributed the downgrade to the lingering weakness in exports, despite a gradual recovery in domestic consumption.
 
It said South Korea may become vulnerable to shocks as measures to raise the nation's financial soundness are being delayed while economic risk factors in the United States and China are emerging.
 
The KDI recommended that the government implement policies to strengthen its fiscal soundness and the central bank maintain the current accommodative monetary policy.
 
The institute predicted that the global economy will grow three-point-six percent next year, but warned that the growth may fall short if the impact of uncertainties in the Chinese economy and an interest rate hike in the United States are bigger than expected.