The state-run Korea Development Institute(KDI) assessed that an economic improvement is being delayed due to weak domestic demand, a factor cited by the institute for the tenth consecutive month.

In a September assessment report on Monday, the KDI said improvement is seemingly limited amid delayed domestic recovery under a high interest rate policy, despite a rapid expansion in the nation's exports.

The institute said recovery continues in the manufacturing sector, citing semiconductor exports and production.

Domestic consumption, however, maintained a weak flow amid a prolonged decrease in product consumption.

Inflation, meanwhile, neared the government's target of two percent in August amid a decline in global petroleum prices.