SEOUL (REUTERS) - South Korea said on Monday (Sept 14) the country's economy has been recovering from the negative effects of the spread of a deadly virus, but it is facing external risks including from planned US Federal Reserve policy changes and a weak Chinese economy.

The finance ministry said in a policy statement submitted to the parliament during an annual policy audit that the possibility of China devaluing the yuan further was among the risks facing Asia's fourth-largest economy.

It also said the US Federal Reserve was expected to begin raising its policy interest rate before year-end but added uncertainty over the timing of the first increase and the speed of monetary tightening was a risk for global markets.