SEOUL, South Korea - South Korea has lowered its growth forecast for this year and next, as external risks continue to pose challenges to exports.

The Ministry of Strategy and Finance said Thursday that South Korea's economy will expand 3 per cent in 2013, lower than its September forecast of 4 per cent. The revision is lower than Bank of Korea's 3.2 per cent growth forecast and the International Monetary Fund's 3.6 per cent.

The ministry said Asia's fourth-largest economy is forecast to expand 2.1 per cent this year, the lowest in three years and lower than its earlier estimate of 3.3 per cent growth.

The government said South Korea's economic growth is falling short of its full potential amid a delay in the global economic recovery and uncertainty, which dampens investor sentiment.

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