S. Korea Faces Growing Risk of Recession

South Korea's economy faces a growing risk of falling into recession as domestic demand and exports are taking a steep downturn amid a global economic slump, according to a government report Thursday.

The monthly economy-assessment report by the finance ministry called on the government to step up efforts to safeguard jobs and stimulate the fast-slowing economy by frontloading its fiscal spending this year.

"Despite easing inflationary pressures, South Korea faces a growing risk of recession as many real economic indicators are worsening, including production, domestic demand and exports," the ministry was quoted as saying by Yonhap News. "With deepening global economic woes, production and exports, among other things, are shrinking remarkably and the local economy is slumping at a face pace," the report said.

The bleak estimate provides a snapshot of South Korea's economy, hit hard by a looming global downturn in the wake of financial turbulence sparked in September. Many indicators are pointing to the first recession in more than a decade for Asia's fourth-largest economy.

Exports, the backbone of the nation's economy, saw a sharp decline in growth, with January exports plunging 32.8 percent from a year earlier. The report predicted that exports will remain sluggish in February.

Consumer goods sales declined 7 percent in December from a year earlier. High-ticket goods especially slumped with automobile sales nose-diving 23.8 percent, the report showed.

The stagnant job market is also denting already-weak consumer sentiment. The economy shed 12,000 jobs in December, the first job loss in more than five years.