South Korean economy was expected to show a long-term growth trend at a gradual pace despite lingering downside risks to the economy, the central bank said Thursday.

"South Korean economy is facing downside risks caused by external risk factors, but the economy is expected to return to the long-term growth trend at a gradual clip," the Bank of Korea ( BOK) said in a statement unveiled after the May monetary policy meeting.

The central bank noted that the nation's economic recovery eased somewhat due to reduction in consumption and investment that outweighed solid exports, but the bank said that the global economy will recover at a moderate pace. The BOK said in a separate statement that the Asia's No.4 economy was expected to see a moderate recovery trend for the time being due to the global economic slowdown, especially in the euro area, saying that downside risks remained in terms of upside and downside risks to its future growth path.

The bank left its 7-day repo rate unchanged at 3.25 percent for 11 straight months due to conflicting factors such as lingering uncertainties at home and abroad and concerns over the high inflation expectations. On inflation, the BOK noted that consumer price inflation fell to 2.5 percent in April due mainly to the government policy effect and easing demand-side inflationary pressure, but the bank said that there remained destabilizing factors such as high inflation expectations and geopolitical risks in the Middle East.