The Korean economy still remains in a sluggish mode due to worse-than-expected exports offsetting some positive signs in domestic consumption and construction investment, a state-run think tank said Monday.

"Although certain indicators exhibited slight improvements, Korea's overall growth remains subdued," the Korea Development Institute (KDI) said in its monthly evaluation of the country's economic conditions.

"Weakening manufacturing and facilities investment, largely brought on by falling exports, has weighed down on the growth momentum of the Korean economy."

Retail sales rose 5.7 percent on-year in March on the back of a 21.5 percent jump in auto sales. In February, the government decided to resume an excise tax cut program on passenger cars, which ended in December last year, in order to boost private consumption.

Construction investment was also on a steady rise in March. The value of completed construction expanded 23.3 percent on-year in March supported by brisk residential building constructions.

Other economic indicators, however, showed little signs of recovery as fast-falling exports pulled down the entire economic performance of Asia's fourth-largest economy.

"Mining and manufacturing production and shipments continued their downward trend, implying that overall production activity remains subdued," the KDI said.

Industrial output fell 1.5 percent in March due to the sluggish semiconductor sector, while the manufacturing capacity utilization rate stayed low at 73.2 percent.

Facility investment marked a 7.8 percent fall in March, nearly unchanged from a 7.7 percent fall in the previous month.

Exports, the country's key economic driver, sank 11.2 percent in April due to a sharp drop in shipments of autos, flat displays and petroleum products, accelerating the declining pace from a 8.1 percent drop in March.

The KDI said the Korean economy will likely remain in the doldrums for a while as weakening global demand and low oil prices will keep dragging down the country's exports.

"Leading economic indicators from Organization for Economic Cooperation and Development countries and major emerging markets have been hovering around the lowest level since the global financial crisis, indicating that export conditions will not improve any time soon," the think tank said. (Yonhap)