Foreign investment banks predict South Korea's exports to remain sluggish down the road due to continued unfavorable conditions, weighing down on the growth of Asia's fourth-largest economy, a report showed Sunday.

According to the report by the Korea Center for International Finance, Barclays, Nomura, Citigroup and other foreign investment banks have forecast South Korea's overseas shipments not to recover from their slump for the time being because of such negative factors as a drop in oil prices, China's economic slowdown and weak global demand.

Barclays is pessimistic about South Korea's exports in the coming months, saying the drop in the country's overseas shipments slowed due mainly to increased ship exports.

South Korea's exports declined 4.7 percent in November from the same month a year earlier, compared with a 15.9 percent tumble in October.

Nomura estimates South Korea's exports will remain in the doldrums next year, though Seoul's ratification last week of a free trade deal with China may help boost its exports in the medium to long term.

Citigroup has pointed out that South Korea's exports will likely decline at a fast pace in December in the absence of increased ship orders as seen in November, according to the report.

The foreign investment banks also predict South Korea's industrial output and corporate investment may weaken again down the road due to weak demand from overseas.

South Korea's industrial output fell 1.4 percent on-month in October, compared with a 2.2 percent on-month gain in September.

In light of that, Citigroup has projected South Korea's economic growth to sink to 0.4 percent for the October-December period, according to the KCIF report.

The South Korean economy expanded 1.3 percent in the third quarter from three months earlier, the highest gain since the 1.7 percent growth in the second quarter of 2010.

Meanwhile, the foreign investment bank forecast South Korea's consumer inflation range from 1.5 percent to 1.8 percent next year, fueled by a recovery in consumer sentiment, according to the KCIF. (Yonhap)