South Korea's top economic policymaker has forecast that economic instability could rise next year, taking into account various external factors.

At Monday's parliamentary audit, Finance Minister Kim Dong-yeon said the government's economic forecast for the upcoming year will be included in its policy direction set to be released in December.

Kim disagreed that the South Korean economy was in crisis but stressed the need to be prepared for downside risks and instabilities.

The finance minister said the Moon Jae-in administration's income-led growth policy is part of an effort to resolve social and economic structural issues and should go together with innovative growth initiatives to achieve sustainable growth.