Economy of North Korea

Economy of North Korea
Laika ac Pyongyang (7975203722).jpg
CurrencyNorth Korean won
Calendar year
Statistics
GDP$28.5 billion (nominal, 2016)[1]
GDP rank125th (nominal) / 96th (PPP)
GDP growth
3.9% (2016 est.)[1]
GDP per capita
$1,300 (2016, nominal)[2]
GDP by sector
Mining and industry 34.4%, services 31.3%, agriculture and fisheries 21.8%, construction 8.2%, utilities 4.3% (2014 est.)[3]
Labour force
14 million (2014 est.)[4]
Unemployment25.6% (2013 est.)[4]
Main industries
Military products, mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy, textiles, food processing[4]
External
Exports$2.985 billion (2016 est.)[4]
Export goods
Minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products,[5] coal, iron ore, limestone, graphite, copper, zinc, and lead
Main export partners
 China 82.7%,
 India 3.5%,
 Pakistan 1.5%,
 Burkina Faso 1.2% (2015)[6]
Imports$3.752 billion (2016 est.)[4]
Import goods
Petroleum, coking coal, machinery and equipment, textiles,[5] and grain
Main import partners
 China 85%,
 India 3.1%,
 Russia 2.3%,
 Thailand 2.1%,
 Philippines 1.5% (2015)[7]
$20 billion (2011 est)[8]
Public finances
Revenues$3 billion
Expenses$3 billion
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of North Korea is a centrally planned system, where the role of market allocation schemes is limited, though increasing.[9][10] As of 2015 North Korea continues its basic adherence to a centrally planned command economy. There has been some economic liberalisation, particularly after Kim Jong-un assumed the leadership in 2012, but reports conflict over particular legislation and enactment.[11][12][13][14][15][16]

The collapse of the Eastern Bloc from 1989 to 1991, particularly North Korea's principal source of support, the Soviet Union, forced the North Korean economy to realign its foreign economic relations, including increased economic exchanges with South Korea. China is North Korea's largest trading partner.[17]

North Korea had a similar GDP per capita to its neighbor South Korea from the aftermath of the Korean War until the mid-1970s,[18][19] but had a GDP per capita of less than $2,000 in the late 1990s and early 21st century.

Size of the North Korean economy

Estimating gross national product in North Korea is a difficult task because of a dearth of economic data[20] and the problem of choosing an appropriate rate of exchange for the North Korean won, the nonconvertible North Korean currency. The South Korean government's estimate placed North Korea's GNP in 1991 at US$22.9 billion, or US$1,038 per capita. In contrast, South Korea posted US$237.9 billion of GNP and a per capita income of US$5,569 in 1991. North Korea's GNP in 1991 showed a 5.2% decline from 1989, and preliminary indications were that the decline would continue. South Korea's GNP, by contrast, expanded by 9.3% and 8.4%, respectively, in 1990 and 1991.[17]

It is estimated that North Korea's GNP nearly halved between 1990 and 1999.[21] North Korean annual budget reports suggest state income roughly tripled between 2000 and 2014.[22] By about 2010 external trade had returned to 1990 levels.[23]

The South Korea-based Bank of Korea estimated that over 2000 to 2013 average growth was 1.4% per year.[24] It estimated that the real GDP of North Korea in 2015 was 30,805 billion South Korean won. The same year, it published the following estimates of North Korea's GDP growth:[25]

GDP growth by year (Bank of Korea estimate)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0.4% 3.8% 1.2% 1.8% 2.1% 3.8% −1.0% −1.2% 3.1% −0.9% −0.5% 0.8% 1.3% 1.1% 1.0% −1.1%

According to analyst Andrei Lankov, writing in 2017, a significant number of observers believe that the Bank of Korea is too conservative and the real growth rate is 3-4%.[26][10] North Korea reported that the government budget has been increasing at between 5% and 10% annually from 2007 to 2015. Reported planned capital expenditure, mainly on roads and public buildings, increased by 4.3% in 2014, 8.7% in 2015 to 13.7% in 2016.[27]

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