South Korea's economic growth rate is feared to stagnate or lapse into negative territory in the first half of 2012 on escalating global economic uncertainties that could make a significant dent in the export-focused economy, analysts warned Sunday.

The warning came a day after global credit ratings agency Standard & Poor's downgraded the credit ratings of nine European countries amid the region's debt crisis, including France, whose credit rating was knocked down by one notch from AAA to AA+.

The analysts said the simmering eurozone sovereign debt turmoil will inevitably have a direct impact on the region's economies and subsequently dampen South Korean exports to them. Shipments to the European Union (EU) accounted for 10 percent of South Korea's overall exports last year.

To make matters worse, financial instability in Europe is expected to increase burdens on the United States and China, the world's top two economies, and put a damper on the export-oriented South Korean economy, they added.

"We can not rule out the possibility that South Korea's first-quarter growth will rate remain flat from the previous quarter or shrink," said Bae Sang-keun, a senior researcher at the Federation of Korean Industries, or the lobby for South Korea's top conglomerates.

Private consumption, corporate capital spending and construction investment are unlikely to pick up the slack, creating a highly unfavorable environment and prolonging the economic slump into the second quarter of this year, he said.

In a recent outlook on the South Korean economy, global investment bank Nomura said Asia's fourth-largest economy will likely contract 0.1 percent in the current quarter from the fourth quarter of last year.

Nomura also cut its full-year growth for the South Korean economy to 3 percent from 5 percent made last year, saying South Korea will be hit hardest by the fallout from Europe's fiscal crisis and slumping demand from China.

Credit Suisse, JP Morgan and several global investment banks have forecast the eurozone to post negative growth rate in the first quarter of this year, following a contraction during the fourth quarter of last year.

The prediction has sparked worries over a severe negative impact on South Korean exports to the economic bloc.

In a recent report, Daishin Economic Research Institute predicted that a 1 percent drop in the EU growth rate would shave 4 percent off South Korea's shipments to the region.

South Korean exports to the EU rose 5.5 percent on-year to $54.3 billion in 2011. The annual growth rate was far lower than the previous year's 14.8 percent surge.

A fall in South Korea's exports is feared to worsen its domestic problems, such as high household debts, watchers said.

"Falling exports could slow economic growth, reducing household income and weakening households' ability to repay debts," an analyst said on condition of anonymity. "That could in turn cool the economy further and atrophy private consumption, creating a serious crisis." (Yonhap News)