A state-run think tank has assessed that the South Korean economy remains sluggish due to the resurgence of COVID-19.

The Korea Development Institute (KDI) said in its monthly economic assessment report on Sunday that despite the recent recovery in the manufacturing sector, the Korean economy remains sluggish mainly in the service industry due to the rapid domestic resurgence of the epidemic.

The KDI said the manufacturing sector sustained a recovery thanks to robust exports and rises in consumption of durable goods and facility investments.

The daily average of South Korea's exports gained seven-point-nine percent on-year in December last year. Facility investments increased seven-point-five percent on-year in November last year.

However, the output of the service industry dropped one-point-four percent in November from a year earlier.

Retail sales, a key indicator of consumption levels, also shrank one-point-five percent on-year in November.