The South Korean government Monday cut its economic growth forecast for 2012.

The Ministry of Strategy and Finance expects the economy to expand 3.7 percent next year after growing 3.8 percent this year. This was sharply lower than 4.5 percent growth projected for both years in June. The government has cited weak exports due to sluggish global economic conditions as the reason for the cut.

The Korean economy is slowing down as the external conditions are becoming unfavorable, the ministry said.

As for its economic management plans for the coming year, the government will remain in emergency mode, and tackle persisting external uncertainties through a flexible use of macroeconomic policies and consistent monitoring of contingency plans.

The ministry said it would accommodate the working class by stabilizing consumer prices of daily necessities and revitalizing the job market. Also the government would support economic activity through a policy package including tax breaks and hiring incentives.

South Korea would create 280,000 jobs next year, after adding 400,330 this year, the government report said. Exports are projected to increase 7.4 percent next year, down from 19.2 percent jump this year.

The ministry raised its 2012 inflation outlook to 3.2 percent from 3.0 percent. The ministry's director-general of economic policy, Choi Sang-Mok, said the government would prioritize macroeconomic stability rather than growth alone.