Seoul,  The South Korean economy is expected to expand 2.8 per cent on-year in 2022, slower than this year's projected 3.9 per cent growth, amid weaker private consumption and global demand, a local think tank said on Sunday.

The projection by the LG Economic Research Institute (LGERI) is lower than that by the International Monetary Fund (IMF) of 3.3 per cent and the 3.0 per cent estimate by both the Organization for Economic Cooperation and Development (OECD) and the Bank of Korea, Yonhap news Agency reported.

"The export-led growth is likely to lose steam next year, as global demand boosted by a post-pandemic recovery is expected to get weakened," the institute, affiliated with South Korea's fourth-largest conglomerate LG Group, said.

During the first 11 months of this year, the country's cumulative exports logged the highest ever figure of $583.8 billion, on the back of strong global demand for chips and petroleum products.

The yearly figure is expected to hit an all-time high by beating the previous record of $604.9 billion set in 2018, according to government data.

The institute forecast the South Korean economy to increase 3.9 per cent on-year this year, but the figure could fall further to around 2 per cent after 2023.

Private consumption is expected to mark a 3.1 per cent on-year rise in 2022, compared to 3.4 per cent this year, according to the report.

Employment in such service sectors as food and accommodation is likely to increase to lead the overall gain, but not as much as previous levels due to the Covid-19 pandemic and continued growth in unmanned stores, it showed.

Consumer prices are to grow 2.2 per cent in 2022, compared to 2.4 per cent this year, as global oil prices are forecast to stabilise and overall demand slows down, the institute said.

LGERI also predicted the global economy to grow 3.9 per cent next year, slower than this year's 5.8 per cent growth.