The South Korean economy is forecast to continue its modest recovery pace, a central bank official said Tuesday, amid growing concerns that Asia’s fourth-largest economy may be slowing down as domestic demand lags.

“While we have to judge whether the ups and downs in economic indicators are temporary or stem from fundamental changes, as of now, we believe that the modest recovery trend will continue,” Bank of Korea Deputy Governor Kim Jun-il told reporters in a news conference.

Kim, however, added that the recovery process may not be a stable one in which indicators gradually improve over months.

His remarks come amid views that weak private spending may hurt the country’s growth recovery. Earlier this year, government organizations as well as public-sector firms trimmed their growth outlook for the economy, citing the impact of the Sewol ferry disaster that pummeled consumer sentiment.

The BOK also lowered its outlook for the economy to 3.8 percent from 4 percent. Its next outlook revision is scheduled for next month.

Without elaboration, the central bank official said that the central bank may make interventions to stabilize the market when excessive volatility or herd behavior is seen. (Yonhap)