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

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

"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 percent on-year this year, but the figure could fall further to around 2 percent after 2023.

Private consumption is expected to mark a 3.1 percent on-year rise in 2022, compared to 3.4 percent 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 percent in 2022, compared to 2.4 percent this year, as global oil prices are forecast to stabilize and overall demand slows down, the institute said.

LGERI also predicted the global economy to grow 3.9 percent next year, slower than this year's 5.8 percent growth. (Yonhap)