South Korea's economic recovery was restricted by lackluster domestic demand though exports showed a relatively rosy picture, a state-run economic think tank said Tuesday.

The Korea Development Institute (KDI) said in a monthly report that exports maintained a relatively positive growth on demand for locally-made semiconductors.

The KDI, however, noted that domestic demand weakened a bit amid the slowing recovery in private consumption and the faltering corporate investment.

Affected by the trend, recovery in production eased further except for some industries including the chip sector.

The country's retail sales gained 4 percent in June, lower than a 4.5-percent increase in the previous month.

Consumer sentiment index over economic situations tumbled to 101.0 in July from 105.5 in the prior month.

Production in all industries was unchanged in June from a month earlier, after growing 1.6 percent in May. Output in the mining and manufacturing industries declined 0.4 percent in June.

Semiconductor production jumped 24.9 percent in June, but output in other industries, including automobile and equipment, lost ground in the month.

Exports, which account for about half of the export-driven economy, expanded 6.2 percent in July from a year ago thanks to solid demand for locally-made chips.

Imports advanced 16.2 percent in July from a year earlier, after rising 10.8 percent in the previous month.