The Bank of Korea (BOK) says despite robust exports, the economy is losing momentum in its upward growth due to sluggish domestic demand.

According to the economic outlook report by the central bank, the nation’s exports to emerging markets are continuously growing, but sluggish domestic demand is undercutting the nation’s overall growth.

The report projected inflation to remain high for a considerable period due to high costs.

However, BOK said the pace of the slowdown is unlikely to be steep thanks to strong export growth.