South Korea is on its way to an economic recovery, but uncertainties due to external factors remain according to an economic think tank in its monthly report on Wednesday.

The Korea Development Institute stated in the February issue of its monthly economic trend report that the economy is making a recovery, with the growth of the manufacturing industry offsetting the decline in the service sector.

However, there are still uncertainties, as indicated by the soaring prices of raw materials and unstable financial markets.

The manufacturing industry saw growth last year, with a temporary alleviation of the auto parts shortage and favorable trends in semiconductors contributing to an increase of 6.5% from the year before.