Bank of Korea Announces '2023 North Korea Economic Growth Rate Estimate'
Foreign Trade Up 74.6%
No Inter-Korean Import-Export Performance Last Year
North Korea's economy grew for the first time in four years. This was due to the easing of COVID-19 related controls, increased foreign trade with China, and favorable weather conditions. Last year, there were no records of trade between South and North Korea.
According to the "2023 North Korea Economic Growth Rate Estimate" released by the Bank of Korea on the 26th, North Korea's real Gross Domestic Product (GDP) increased by 3.1% compared to the previous year. The North Korean economy had slight growth in 2019 (0.4%), but experienced negative growth for three consecutive years in 2020 (-4.5%), 2021 (-0.1%), and 2022 (-0.2%) before turning positive again after four years.
Kang Chang-gu, head of the National Income General Team at the Bank of Korea's Economic Statistics Bureau, explained, "The economy, which had been sluggish due to overlapping UN sanctions on North Korea and COVID-19 related controls, has rebounded somewhat. Since agriculture, forestry, and fisheries account for a significant portion of North Korea's economy, the increase in crop production due to favorable weather conditions also raised the growth rate."
He added, "Since the previously sluggish parts have improved, it is difficult to interpret this as the economy becoming active. Many North Korea experts evaluate the growth rebound as temporary."
Last year, North Korea's foreign trade volume was $2.27 billion, a 74.6% increase from the previous year ($1.59 billion). Exports were $330 million, up 104.5% from the previous year, and imports were $2.44 billion, up 71.3%.
Last year, trade and economic cooperation between South and North Korea, including exports and imports, amounted to zero dollars, showing no activity. Trade between the two Koreas totaled $3.226 billion until 2016, but after the closure of the Kaesong Industrial Complex in 2016, trade activity has been minimal recently.
Kang explained, "The suspension of trade between South and North Korea was due to North Korea's nuclear tests and subsequent UN sanctions, rather than the impact of the current government's inauguration."
Looking at trends by industry, agriculture, forestry, and fisheries (1.0%), mining (2.6%), manufacturing (5.9%), construction (8.2%), and services (1.7%) increased, while electricity, gas, and water supply (4.7%) decreased.
Regarding North Korea's industrial structure, the share of the service sector was 30.9%, down 2.5 percentage points from the previous year, and agriculture, forestry, and fisheries (22.0%) fell by 1.1 percentage points.
On the other hand, mining and manufacturing accounted for 30.7%, up 0.2 percentage points from the previous year; electricity, gas, and water supply was 5.4%, up 3.2 percentage points; and construction was 11%, up 0.2 percentage points.
North Korea's nominal Gross National Income (GNI) was 40.9 trillion won, which is about 1.7% or one-sixtieth of South Korea's.
Per capita GNI was 1.589 million won, about 3.4% or one-thirtieth of South Korea's level.
The Bank of Korea has been estimating North Korea's economic growth rate annually since 1991 by receiving basic data related to North Korea's economic activities from related agencies. The North Korean economic growth rate is estimated using basic data prepared by institutions related to the North Korean economy and finalized after verification by domestic experts.
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