Ratings agency Moody's on Monday cut its forecast for South Korea's 2020 economic growth to 1.9 percent from 2.1 percent, citing the economic fallout of the new coronavirus.
The latest forecast by Moody's is lower than the Bank of Korea's prediction of 2.3 percent expansion for this year.
The spread of COVID-19 in China and around the world is expected to have a negative impact on tourism and industrial production in Asian nations, including South Korea and Japan, Moody's said.
Moody's also revised down its economic growth forecast for China to 5.2 percent this year, compared with its previous prediction of 5.7 percent.
South Korea's aviation and tourism sector are expected to take a harder hit from the virus, as a large proportion of visitors come from China.
The nation's manufacturers, including Hyundai Motor and Kia Motors, have been affected by a shortage of auto parts from China.
South Korea's economy grew 2 percent last year, the slowest growth in a decade, hit by a trade war between the United States and China.
The nation's exports fell 10.3 percent on-year in 2019 to $542.4 billion.
Concerns are growing over South Korea's export performance down the road amid the new coronavirus crisis. It is widely feared that the outbreak and spread of the novel coronavirus, which is believed to have originated in the Chinese city of Wuhan, will dampen China's economic growth in the first quarter.
China is South Korea's top trading partner, with slightly over 25 percent of its overseas shipments going to the world's second-largest economy after the United States. (Yonhap)