South Korea’s economy barely grew in the third quarter as consumer spending rebounded but exports fell, with the central bank warning of a likely downgrade to its 2024 growth outlook.

Gross domestic product in the July-September quarter expanded a seasonally adjusted 0.1% from a quarter earlier, the Bank of Korea’s advance estimates showed on Thursday, lower than market expectations.

The weak growth is a setback for Asia’s fourth-largest economy and could exert pressure on the won , which has weakened nearly 5% against the dollar this month, as the central bank’s full-year estimate has already been lowered and is likely to be downgraded further.

Private consumption rose 0.5%, after falling 0.2% a quarter earlier. Construction investment dropped 2.8%, while corporate investment jumped 6.9%.

Exports fell 0.4%, down for the first time since the final quarter of 2022, while imports rose 1.5%, bringing a net negative contribution.

“It is clear that the momentum of exports, which had been supporting the economy, has weakened, while it is too early to say domestic demand is recovering,” said Park Sang-hyun, an economist at iM Securities.

The Bank of Korea, which lowered its full-year estimate from 2.5% to 2.4% in August, said that it will likely be weaker than even that, as it has become “difficult to achieve”. The bank next revises its quarterly economic forecasts in November.

“But, when it comes to monetary policy, it does not necessarily mean an immediate rate cut, because it was the external sector, not the domestic one, that dragged down the headline figure,” Park said. He expects the central bank to lower rates gradually with the next cut in the first quarter of 2025.

The central bank this month lowered interest rates for the first time since mid-2020 and flagged room for more easing, though it said the timing of any further cuts would be carefully examined amid concerns about rising risks to financial stability.

South Korea’s treasury bond yields fell on Thursday, with the policy-sensitive three-year yield down 5.8 basis points to 2.878%, its biggest daily fall since early September.

On an annual basis, the trade-reliant economy grew 1.5%, weaker than the previous quarter’s 2.3% and economists’ expectations of 2.0%. It was the slowest pace since the third quarter of 2023.