SEOUL - THE South Korean economy, buffeted by the global meltdown, is fading fast but looks set to slowly recover in 2009, an International Monetary Fund official said on Tuesday.

'General measures of economic activity are decelerating rapidly,' said Mr Subir Lall, division chief in the Washington-based organization's Asia-Pacific department, said in a speech.

Mr Lall cited slowdowns in consumer spending and exports as well as falling business confidence as evidence for the emerging weakness in Asia's fourth-largest economy.

'Overall, all the indicators are pointing to a slowing of the domestic economy,' Mr Lall said.

The IMF is predicting economic growth of 2 per cent next year for South Korea, a major reversal for an economy that grew 5 per cent in 2007.

Mr Lall, however, painted a more optimistic forecast going forward.

He said growth was likely to bottom out in the first three months of 2009, 'after which there's a gradual recovery in line with the projected recovery in the global economy and improvements in global financial conditions'.

Mr Lall was visiting South Korea as part of regular consultations between fund officials and the South Korean government.

Private economists have mixed views on the outlook for South Korea.

Some see the economy slowing to the 2 per cent to 3 per cent range next year, while others are predicting a full-blown contraction.

South Korea's economy has not experienced such a reversal on an annual basis since 1997, when the country suffered through the Asian economic crisis. -- AP