Global credit rating agency Standard and Poor’s(S&P) has lowered its economic growth outlook for South Korea for this year from two-point-four percent to two percent. 

In its quarterly Asia-Pacific report released on Wednesday, S&P said high inventory levels, mainly in the electronics area, and heightening uncertainties surrounding global trade will continue to weigh down on production and private investment in South Korea. It also assessed that the labor market is relatively vulnerable and is weakening consumption. 

It also projected that the Bank of Korea could slash its benchmark interest rate by a quarter percentage point within the year. 

The latest downgrade comes after the credit rating agency marked down its earlier economic growth outlook for South Korea from two-and-a-half percent to two-point-four percent in April. 

Earlier on Tuesday, U.S. investment bank Morgan Stanley lowered its growth projection for South Korea for this year from two-point-two percent to one-point-eight percent.