The Korea Development Institute(KDI) has downgraded its economic growth forecast for South Korea this year to one-point-six percent.

The state-run think tank released the outlook Tuesday, revising this year’s growth forecast from the two percent figure it released in November.

The downward revision was significantly influenced by the forecast for goods exports, which was revised down from one-point-nine percent to one-point-five percent.

A KDI official said that in November, the think tank expected U.S. tariff increases to unfold gradually, but tariffs on China have already been imposed. 

The official further predicted that if U.S. trade restrictions intensify, or if the current domestic political instability is prolonged, growth could fall short of the one-point-six percent forecast.

The government’s forecast stands at one-point-eight percent and the Bank of Korea projects growth of one-point-six percent to one-point-seven percent.