The South Korean government is sticking to its modest view about economic recovery, citing shaky domestic demand.

In the October edition of the Green Book economic outlook report released on Friday, the Finance Ministry reiterated the assessment made a month earlier that the domestic economy is making strides on the back of exports, but the recovery is not sound enough.

The latest outlook said mining and manufacturing production edged up by zero-point-four percentage points in August from a month earlier, posting growth for a second consecutive month, while production from the services industry went up for a third straight month through August.

Retail sales, however, dropped by one percent from July, marking the first on-month decline in three months.

Meanwhile, the consumer sentiment index for September stood at 107-point-seven, compared with 109-point-nine for August, showing a decline for a second straight month.