South Korea's central bank has lowered its growth outlook on Asia's fourth-largest economy citing Britain's decision to leave the European Union.

Bank of Korea said Thursday South Korea's economy will likely expand 2.7 percent this year, compared with its April prediction of 2.8 percent. Next year, it will eke out just 2.9 percent growth.

The downward revision follows the Finance Ministry's outlook cut last month. It confirms worries that South Korea's once dynamic economy will go through a period of slow growth.

The bank blamed a drag in the global economic recovery due to Britain's decision to leave the EU that increased uncertainties.

The bank says South Korean companies are expected to sharply cut their capital investment this year while the outlook for household income conditions is not optimistic.