South Korea's economy is expected to contract 2 percent this year, Moody's Investors Service said on Wednesday.

In an interview with South Korea's Yonhap News Agency, Tom Byrne, a senior vice president at the Moody's Asia-Middle East regional credit office, said Moody's early prediction in November last year that South Korea's economy might grow 2 percent in 2009 was made on data and trends evident as of September 2009 and was a bit on the pessimistic side.

Byrne added that if the global economy does not regain some stability in the second half of 2009, the growth could be lower.

Moody's downgrade are in line with a growing number of think tanks and research groups which already trimmed their 2009 projections for South Korea's economy.

The Switzerland-based UBS predicted the economy to shrink 3 percent for this year, and JP Morgan and Chase & Co. expected 2.5 percent contraction.

Fitch Ratings expected a minus 2.4 percent while Standard & Poor's recently lowered its outlook to zero percent.

Meanwhile, the Korea Development Institute, South Korea's state- run think tank, predicted the nation's economy grow to 0.7 percent in 2009.

All the figures are far lower than the South Korean government' s growth target of 3 percent for this year and compares with the previous year's 2.5 percent expansion.

(Xinhua News Agency January 28, 2009)