Korea's industrial output grew in June, but its pace sharply decelerated in the face of headwinds from the eurozone debt crisis and concerns over global slowdowns, a government report showed Tuesday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries expanded 1.6 percent last month from a year earlier, sharply slowing from the 2.9 percent on-year gain tallied in the previous month.

The output also contracted 0.4 percent last month compared with a month earlier, the first on-month shrinkage in three months.

The country's service sector production, meanwhile, advanced 1.2 percent in June from a year earlier, but it edged down 0.4 percent compared with the previous month, the report showed.

The data comes as South Korea's economy, heavily dependent on exports, has been faced with shrinking overseas demand for its goods. The government predicted the country's exports will grow 3.5 percent this year, far lower than a 19-percent advance registered a year earlier.

Last month, the government revised down its 2012 growth forecast from 3.7 percent to 3.3 percent, citing such toughened external market situations.

Concerns seem to be deepening further after the central bank earlier announced that the country's economy grew 0.4 percent on-quarter in the April-June period, slowing from a 0.9 percent gain in the first quarter.

This is the slowest growth since a 0.3 percent expansion in the fourth quarter of last year. The economy grew 2.4 percent from a year earlier.

Finance Minister Bahk Jae-wan told a meeting last week that the government will do its best to achieve a 3-percent range growth for this year, saying that the overall growth trend of Asia's fourth-largest economy is being delayed. (Yonhap)