Real gross domestic product (GDP), adjusted for inflation, was expected to rise 2.0 percent this year, down from the previous forecast of a range of 2.4-2.5 percent estimated five months earlier.
The real GDP expanded 3.1 percent in 2017 and 2.7 percent in 2018 respectively.
The Ministry of Economy and Finance forecast that the economy would rebound next year with its growth estimate of 2.4 percent thanks to improvement in export and investment.
The 2020 outlook was higher than figures announced by other institutes at home and abroad. The country's central bank and the state-run Korea Development Institute (KDI) set their growth forecast for next year at 2.3 percent.
The Organization for Economic Cooperation and Development (OECD) expected the South Korean economy to rise 2.3 percent next year, while the International Monetary Fund (IMF) predicted an increase of 2.2 percent.
Some of private think thanks and foreign investment banks expected next year's growth rate for South Korea to fall below 2 percent.
The ministry said international trade was forecast to recover next year in addition to the expected upturn of business cycle of the global semiconductor industry.
According to the World Trade Organization (WTO), the global trade was expected to gain 1.2 percent this year and 2.7 percent next year respectively.
Revenue in the global chip industry was projected to pick up 5.9 percent in 2020, after contracting 12.8 percent in 2019, according to the World Semiconductor Trade Statistics (WSTS) organization.
Export, which takes up about half of the export-driven economy, was expected to increase 3.0 percent in 2020, after tumbling 10.6 percent in 2019.
Import was projected to grow 2.5 percent next year, after sliding 6.4 percent this year.
The outlook for next year's current account surplus was set at 59.5 billion U.S. dollars, higher than this year's estimate of 58 billion U.S. dollars.
Facility investment was forecast to advance 5.2 percent in 2020 after skidding 7.7 percent in 2019. Local chipmakers were expected to increase capital spending amid the cyclical upturn next year.
Through consultations with the private sector, the government planned to encourage private companies to expand investment worth as large as 10 trillion won (8.6 billion U.S. dollars) in 2020.
Construction investment was forecast to fall 2.4 percent in 2020, but it was down from this year's expectation of a 4.0-percent decline.
The government planned to increase investment by public institutes to 60 trillion won (51.5 billion U.S. dollars) next year from this year's 55 trillion won (47.2 billion U.S. dollars).
Private consumption, another engine of economic growth, was predicted to rise 1.9 percent this year and 2.1 percent next year.
To bolster the consumer spending, the government planned to expand welfare policies for the low-income bracket, such as higher basic pension for the elderly and increased benefit for the underprivileged.
The outlook for consumer price inflation was set at 1.0 percent for next year, up from this year's estimate of 0.4 percent on expectations that farm goods price would gain ground despite the cheap global crude oil.
The number of jobs was forecast to grow 250,000 next year, down 30,000 from this year's estimate. The outlook for the employment rate among those aged 15-64 was placed at 67.1 percent in 2020, higher than this year's estimate of 66.8 percent.
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