The government expects the South Korean economy to grow three-point-one percent next year.
 
The Ministry of Strategy and Finance announced its economic forecast for 2016 on Wednesday, saying the economy will improve from this year driven by domestic consumption.
 
It said domestic consumption will continue to recover, helped by low interest rates and oil prices, adding that robust investments will also contribute to growth.
 
However, it expects a limited recovery in exports due to weaker growth in China.
 
Amid predictions that a rate hike in the U.S. is imminent, the ministry expects a rise in external uncertainties will also burden the South Korean economy. 
 
For risk factors at home, the ministry cited the aging society, household debt, weakening competitiveness of key manufacturing industries and possible corporate restructuring.
 
Meanwhile, the ministry lowered its growth forecast for this year by zero-point-four percentage points to two-point-seven percent from three-point-one percent in June. The estimate is the latest to fall to the two-percent range following predictions by the central bank and various financial institutions.