According to Yonhap News,

(SEJONG = Yonhap News) South Korea's economy is on the path of "moderate" recovery, supported by improving domestic demand and exports, a state-run think tank said Tuesday.

"With the construction investment on a steady rise, the private consumption and equipment investment showed a gradual easing in their contraction, suggesting that domestic demand is improving at a modest pace," the Korea Development Institute (KDI) said in its monthly report that analyzes the latest economic trend.

The KDI said exports kept improving in such areas as semiconductor and vehicles. The exports growth is driven mostly by the continuing economic recovery led by advanced countries, the think tank said.

Production and shipment, however, improved at a slower pace, though temporarily, with average facility utilization rate in the manufacturing sector remaining low, which it said pointed to "delayed" improvements in some parts of the economy.

The KDI, meanwhile, said that South Korea's financial market remained relatively stable last month despite the decision by the U.S. to begin tapering off its stimulus program, saying that it had "limited" impact.