South Korea on Thursday slashed its 2017 economic growth outlook by 0.4 percentage points, bolstering concerns about the protracted low-growth trend, a government report revealed.

Next year’s growth forecast was cut to 2.6 per cent from 3.0 per cent unveiled six months earlier, according to the Ministry of Strategy and Finance. The economic expansion below 3 per cent is forecast to last for three years in a row, Xinhua news agency reported.

Real gross domestic product (GDP) expanded 3.3 per cent in 2014, but the growth rate declined to 2.6 per cent in 2015. The ministry set this year’s growth forecast at 2.6 per cent.

The downward revision for next year stemmed mainly from the expected slowdown in private consumption amid the expected interest rate hikes in the US.

Confidence among consumers already worsened on political unrest caused by the impeachment of President Park Geun-hye.

The ministry’s growth outlook for consumer spending was set at 2.0 per cent in 2017, lower than the estimated 2.4 per cent expansion in 2016.

Forecast for job creation was estimated to grow 260,000, falling below 300,000 amid the ongoing restructuring in the shipbuilding and shipping sectors, which have struggled to cut jobs and reduce facility on lower global trade and lackluster global recovery.

Weaker labour market conditions would weaken consumer spending further. Outlook for jobless rate next year was put at 3.9 per cent, slightly higher than this year’s 3.8 per cent.

Exports, which account for about half of the export-driven economy, is forecast to rebound 2.9 per cent next year from an estimated 6.1 per cent reduction this year on higher prices of semiconductor that has recently prevented a steep fall in overall exports.

Outlook for 2017 current account surplus was $82 billion, compared with this year’s $94 billion on the expected faster increase in imports than exports.

The ministry set its 2017 forecast for consumer price inflation at 1.6 per cent, higher than this year’s 1.0 per cent on the estimated price increase in crude oil and cereal.