South Korea's major economic think tank says the country's economic recovery is slowing down due to persisting global supply bottlenecks and soaring raw material prices.

The Korea Development Institute(KDI) said on Thursday that despite a steady recovery in the service sector as the government lifted almost all social distancing measures, the manufacturing sector is losing steam, weakening Korea's overall turnaround.

On-year service sector growth increased in April, with the food and lodging industries expanding by over 17 percent. However, the output of major industries in the manufacturing sector during the same period dropped from a month prior.

The KDI added that Korea's exports have also weakened amid a slowing global economy and China's COVID-19 lockdowns. Low consumer sentiment, triggered by high inflation and interest rate hikes at home and abroad, further dragging the economy.

Exports slowed in May amid unfavorable external factors, with the average daily volume increasing by only about ten percent on-year.