A state-run think tank says that a slump in the country's domestic demand deepened amid the third wave of COVID-19 infections, but a rise in goods exports has partially buffered an economic slowdown.

The Korea Development Institute (KDI) gave the assessment in its monthly economic assessment report issued on Sunday.

The KDI said the economic slowdown is continuing, especially in domestic demand, due to a sharp decrease in consumption and employment.

Retail sales, a key indicator of consumption levels, shrank two percent on-month in December last year, with credit card sales plunging 14-point-four percent in January on-month.

The KDI said consumption will remain sluggish for the time being as the nation was under strong social distancing regulations in January as well.

But the country's exports grew eleven-point-four percent on-year in January, with shipments of semiconductors and autos jumping over 21 percent and 40 percent, respectively.