Moody's Investors Service, a global credit rating agency, has forecast that the South Korean economy will grow a little over two percent this and next year.

In its global macro outlook report for 2019 to 2020, Moody's said Monday that based on real gross domestic product(GDP), South Korea's growth rate will likely be just above two percent for both years, noticeably lower than last year's two-point-seven percent growth.

In a previous report issued in November, the agency had forecast the Korean economy to grow two-point-three percent this year and two-point-five percent next year.

Moody's cited a weak investment cycle and slowing global trade as factors undermining Korea's growth momentum in its latest report.

It added that sluggish Chinese demand for chips in particular is adversely affecting Korean exports and investment.

The report also blamed a minimum wage hike for lackluster growth in employment, saying that medium- and small-sized firms see the increase as undermining their competitiveness.