The International Monetary Fund(IMF) says the South Korean economy is facing difficulties at home and abroad and its potential to grow is slowing down.

An IMF team led by Deputy Director at the Asia and Pacific Department Kalpana Kochhar, presented the assessment on Wednesday, releasing the results of its annual evaluation of the South Korean economy and consultation with South Korean officials.

The IMF assessed that the country’s income level has not reached yet the point of the leading economies of the Organization for Economic Cooperation and Development, while its growth potential is falling.

It also noted that in the face of a rapidly aging population and a slowdown in the global trade, South Korea is meeting structural headwinds such as high dependence on exports, distortions in the labor market and low productivity in the service industry and small firms.

The IMF said that the South Korean economy is expected to grow two-point-seven percent this year to achieve a modest recovery, but downside risks exist due to external uncertainties and a possible slowdown in the recovery of consumption.