South Korea's economy is expected to contract 0.3 percent this year, a private research institute said Sunday, as the coronavirus pandemic crippled economic activities worldwide.

The forecast by Hyundai Research Institute, however, is higher than the International Monetary Fund (IMF), which has predicted that Korea's economy will shrink 1.2 percent this year as the global economy is expected to hit its worst year since the Great Depression of the 1930s over the pandemic.

The world economy is expected to contract 3 percent this year, the IMF said.

Hyundai expected Korea's economy to shrink 0.9 percent in the first half, but it is expected to grow 1.4 percent in the second half as the government announced massive stimulus packages to revive growth.

South Korea's economy contracted 1.4 percent on-quarter in the first quarter of this year, marking the sharpest quarterly contraction since the fourth quarter of 2008.

Finance Minister Hong Nam-ki said last week that the pandemic's shocks to Korea's exports and job markets could widen in the second quarter.

Last week, the government announced an aid package worth 40 trillion won ($32 billion) for key industries hit by the pandemic and another 10 trillion-won scheme to protect jobs.

South Korea's exports sank 27 percent on-year in the first 20 days of April to $21.7 billion. (Yonhap)