South Korean Finance Minister Bahk Jae-wan.

South Korea's growth is likely to slow down in the second half of this year as the export-dominated economy grapples with a global slowdown, Finance Minister Bahk Jae-Wan said Friday.

“The country's full-scale economic recovery is being delayed,” Bahk said. “Growth in the second half will be lower than expected.”

The ministry last week cut its full-year growth forecast for Asia's fourth largest economy to 3.3 percent from its December projection of 3.7 percent.

“Deteriorating external conditions, like the fiscal crisis in Europe, are delaying full-scale economic recovery,” it said in a report.

Bahk told a press conference the Korean economy has “performed pretty well” despite Europe's debt crisis and slowing growth in other major economies, with solid job growth and easing inflation.

But he cited the sluggish housing market and rising household debt as major challenges in the short term.

Household debt stood at 857.8 trillion won ($756 billion) at the end of March. The Financial Supervisory Service called this week for action to curb the figure, saying it poses a great risk to growth.

Longer-term, Bahk stressed the importance of securing adequate fiscal capacity to cope with problems caused by the rapidly ageing population. -Sapa-AFP