The Korea Economic Research Institute(KERI) predicted Wednesday that the country's economy will shrink by two-point-three percent this year.

This is a downward adjustment of four-point-two percentage points from its initial estimate of one-point-nine percent.

KERI, which is an affiliate of the Federation of Korean Industries, noted that such a severe downturn is inevitable given the impact of the COVID-19 outbreak.

Despite extensive government efforts, KERI said production and consumption are virtually at a standstill and the contraction of business in the U.S. and China is making a turnaround ever more elusive.