South Korea's unemployment rate fell in May to its lowest in four months with the availability of more jobs in the service sector, according to figures reported by Statistics Korea Wednesday.

The data showed that the unemployment rate fell to 3.2 percent in May from 3.4 percent in April. The economy added 472,000 jobs in May from a year earlier, up from 455,000 in April.

This report comes after the Bank of Korea (BoK) last week held its policy rate at 3.25 percent, though it noted that the risks to growth were becoming larger due to an escalation of the euro zone crisis. The Asian Development Bank (ADB) reported in April that the country's economic growth was expected to slow down as its exports were going to be badly impacted by the decreasing global demand.

In April, South Korea's central bank lowered the country's growth forecast for 2012 to 3.5 percent on account of the global economic slowdown that has resulted in the weakening of exports. In its revised 2012 economic outlook, the BoK said that it was lowering the 3.7 percent growth projection made in December.

The BoK's decision to hold its policy rate was in large part due to lingering inflation worries that it has maintained. Headline consumer price index held steady at 2.5 percent year-over-year in May (the lower half of the central bank's 2 percent to 4 percent target range), while core inflation of 1.6 percent was the lowest over the last year.

There is a possibility that the BoK will have to further cut the growth forecast for the year if the situation in Europe worsens, subsequent to the re-emergence of debt problems in Spain. The business sentiment too is not expected to be positive as a result of the looming debt crisis over the euro zone, which in turn will affect the job market.