A local think tank forecasts that economic growth this year will dip below three percent, which is lower than last year's three-point-one percent growth.

The Korea Economic Research Institute(KERI) which is under the Federation of Korean Industries on Thursday released its first quarter report on economic outlook and policy tasks.

In the report, it projected that growth this year will drop to two-point-eight percent affected by a sharp slowdown in facility and construction investments.

The figure is the same projection the institute issued in the previous quarter.

The private think tank predicts that investment in facilities which posted a steep 14-point-six percent growth last year will plunge to three percent growth this year due to deterioration in investment conditions such as higher interest rates, higher corporate tax and reduced tax deductions.

Meanwhile, investment in construction is forecast to slip to minus zero-point-one percent growth due to a number of factors, including reduced budget for social overhead capital, strong regulatory measures on real estate and a decrease in land area permitted for construction.