South Korea's economy slowed down at a moderate pace due to slowing exports and weak domestic demand, a state-run think tank said Sunday.

"Our overall economy slowed down recently as export growth slowed at a moderate pace and domestic demand weakened slightly," the Korea Development Institute (KDI) said in its monthly report on economic conditions.

The report was based on the latest major economic indicators including industrial output, private consumption, trade balance and employment.

Production in mining and manufacturing sectors contracted 0.4 percent in November from a month earlier, marking the second straight month of contraction.

Retail sales shrank 0.6 percent on-month in November, and consumer confidence fell below the benchmark 100 points to 99 last month, down 4 points from the previous month.

Exports grew 12.5 percent on-year in December, but the growth slowed down compared with the 13.8 percent on-year expansion in November.

The KDI, however, noted that the country's labor market continued to paint a rosy picture, citing the high growth rate of jobs being created in recent months. The number of people employed expanded 479,000 in November, maintaining its high growth trend.

Touching on external risks, the KDI still painted a gloomy picture, citing Europe's debt crisis and the possible global economic downturn. "Some economic indicators in advanced nations improved somewhat, but the global economy still faces downside risks factors such as slowing growth and the fiscal crisis," the report said.