The government has tempered its economic outlook amid supply chain concerns and high inflation.

In its monthly economic assessment report called the Green Book released on Friday, the finance ministry saw a continued rebound in the nation's exports and the job market. Still, it raised concerns that the pandemic and the war in Ukraine will restrict recovery in domestic demand and over mounting consumer prices.

It said that external uncertainties have heightened due to global supply disruptions, inflationary pressure, Chinese cities in lockdown, and central banks accelerating monetary tightening policies.

The outlook appears more grim than the ministry's assessment last month.

South Korea's consumer prices in March grew more than four percent on-year for the first time in ten years on the back of surging energy costs.

The Bank of Korea on Thursday raised its key interest rate by a quarter percentage point to one-point-five percent in a bid to tame inflation.

Meanwhile the government’s decision to lift all social distancing measures from Monday may ease the pressure on the economy, as it adopts measures to boost consumer spending.