North Korea's economy grew by 3.5% last year, marking three consecutive years of growth above 3%. The expansion was driven by increased economic cooperation with Russia.
According to a report released by the Bank of Korea on July 31, the country's real gross domestic product (GDP) reached 38.264 trillion won, a 3.5% increase from the previous year.
North Korea's economy had experienced three consecutive years of negative growth from 2020 before returning to an upward trend in 2023, with growth rates of 3.1% in 2023 and 3.7% in 2024, resulting in three years of growth above 3%.
The Bank of Korea stated, "The expansion of North-Russia economic cooperation, increased trade with China, and the implementation of national policy projects have contributed to sustained growth above 3% for three consecutive years."
Seo Jeong-seok, head of the Bank of Korea's National Income Division, noted, "Externally, the expansion of North-Russia economic cooperation and increased trade with China have driven growth. The increase in arms exports has boosted production in manufacturing and related industries, while the expansion of transportation networks has also contributed to growth in the tourism and hospitality sectors." He added, "The dispatch of personnel to Russia and the inflow of foreign currency from deployments have also impacted the increase in national income."
Internally, the effects of national policy projects have been significant. The construction of local light industrial factories under North Korea's '20x10 Local Development Policy' has led to increased investment in light industry, resulting in higher production and exports of consumer goods.
Last year, North Korea's economic growth was sustained in sectors such as manufacturing and construction, while agriculture and forestry transitioned to growth, although mining saw a slowdown in its growth rate.
In manufacturing, heavy and chemical industries grew by 7.8%, while light industries increased by 3.8%, reaching their highest levels since 2022. Agriculture and forestry grew by 3.6%, primarily driven by cultivation. The construction sector saw a 6.3% increase due to growth in non-residential building and civil engineering projects.
Mining, however, only increased by 1.6%, marking its lowest growth rate since 2021. The service sector grew by 1.8%, led by transportation, communications, retail, and hospitality, achieving its highest growth rate since 1994.
In terms of industrial structure relative to nominal GDP, the shares of agriculture and forestry (20.9% to 21.2%) and electricity, gas, and water supply (7.2% to 7.4%) increased, while the shares of mining (30.5% to 30.1%) and services (29.8% to 29.6%) decreased.
Last year, North Korea's gross national income (GNI) was 48.5 trillion won, approximately 1/56th of South Korea's GNI of 2,717.1 trillion won, accounting for only 1.8%. Per capita GNI was 1.873 million won, a 9.0% increase from the previous year, but only 1/28th (3.6%) of South Korea's per capita income of 52.57 million won.
The total volume of external trade (excluding inter-Korean trade) was $3.13 billion, a 16.0% increase from the previous year’s $2.7 billion. Exports, amounting to $470 million, rose by 30.0%, driven by products such as processed seafood, wigs, toys, and sports equipment. Imports totaled $2.66 billion, a 13.9% increase, primarily in clothing and vegetable oils.
There was no inter-Korean trade last year. The inter-Korean trade volume, which reached $332.6 million in 2016, sharply declined after the closure of the Kaesong Industrial Complex that year, dropping to $3.9 million in 2020, $1.1 million in 2021, and $100,000 in 2022, with no recorded trade since 2023.
* This article has been translated by AI.
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