South Korean President Lee Myung-bak said on Thursday the country's real economy might fall in stagnation and ordered the government to take preemptive measures against economic slowdown.

"It is highly possible that the real economy could begin to stagnate full-scale from now on, so we need to take more thorough and preemptive countermeasures," the president was quoted as saying by his spokesman, Lee Dong-kwan.

Lee convened the first meeting of the Emergency Economy Management Council, which was set up under a government effort to stabilize the crisis-stricken economy, on Thursday.

South Korea's Ministry of Strategy and Finance said on Thursday at a report that the country's economy is facing an increasing risk of sliding into recession as exports slump and domestic demand weakens amid global economic slowdown.

"Despite easing inflationary pressures, South Korea faces increased risk of recession as many real economic indicators are worsening, including slumping production, anemic domestic demand and exports," the ministry said at the monthly report.

The report showed that exports and domestic demand are slowing at a faster-than-expected pace, weighing on production activities in the local manufacturing sector.

According to the ministry, South Korea's exports plunged 17.4 percent in December from a year earlier while the contraction is expected to accelerate in January amid intensifying global recession woes.

With weakening domestic demand and exports, industrial production plunged to an all-time low in November, with output contracting 14.1 percent from a year earlier, it said.

(Xinhua News Agency January 8, 2009)