First Vice Finance Minister Bang Ki-seon, center, speaks during a press conference in the central city of Sejong, Dec. 19. Yonhap

Korea's finance ministry on Wednesday lowered the country's 2023 economic growth to 1.6 percent as the country braces for the impact of global monetary tightening moves and weaker exports.

The government's projection marked a sharp decrease from the 2.5 percent growth outlook projected by the ministry in June following the launch of the new administration

It also falls below the 1.7 percent growth outlook suggested by the Bank of Korea (BOK). The International Monetary Fund expects the Korean economy to grow 2 percent next year.

For 2022, the finance ministry said Asia's No. 4 economy is estimated to have grown 2.5 percent on-year.

Korea suffered a "triple whammy" of inflation, high interest rates and the strong U.S. dollar throughout this year, which weighed down the country's post-pandemic recovery.

Next year, the finance ministry said the uncertainties surrounding the Chinese economy and the Russia-Ukraine war are expected to continue to put downward pressure on Korea and the global economy.

"Korea is still facing challenging external conditions, with the hurdles expected to rise further in the first half of next year," First Vice Finance Minister Bang Ki-seon told reporters earlier this week.

"The slowdown in the real economy is being realized led by (weaker) exports amid the slow growth of the global economy and the sluggish chip market," Bang added.

With exports and investment expected to remain in the doldrums following the contraction of the global economy, the finance ministry said in its report that high borrowing costs will weigh down consumption in 2023.

Korea estimated private consumption to grow 2.5 percent on-year in 2023, compared with the 4.6 percent growth this year, as people gradually feel the pinch of rate hikes.

In sync with the global central banks' move to raise borrowing costs, the Bank of Korea has hiked the rate by a combined 2.75 percentage points since August last year, eventually reaching 3.25 percent at the final rate-setting meeting of this year in November.