North Korea’s Economy Sees Significant Growth

South Korea’s central bank, the Bank of Korea (BOK), reported on Friday that North Korea’s economy is expected to grow by 3.7% in 2024, which marks the fastest growth rate the country has experienced in eight years.

BOK analysts attributed much of this upward trend to North Korea’s strengthening economic relationship with Russia.

They noted that the notable growth was largely driven by an increase in the manufacturing, construction, and mining sectors, supported by bolstering domestic policies and enhanced economic cooperation with Russia.

It’s interesting to consider, just two years ago, the North Korean economy was essentially stagnant. In contrast, it managed a growth of 3.1% in 2023, followed by the anticipated 3.7% in 2024. Some industries are seeing even more substantial increases; for example, the severe chemicals sector saw a remarkable 10.7% growth last year.

The Korea Defense Analysis Institute (KIDA) estimated that, in April, North Korea benefited economically to the tune of $20.6 billion from supplying Russia with troops and military resources to aid in the Ukraine conflict. Reports indicate that North Korea has not only sent a significant amount of outdated equipment and ammunition but also deployed forces to bolster Russian operations against Ukrainian resistance.

Manufacturing and mining sectors make up about 30% of North Korea’s economy and have reportedly grown by 7.6%. The construction industry, fueled by large government initiatives aimed at rebuilding the country, has expanded by 12.3%. This has been promoted through media coverage of families moving into newly reconstructed homes.

On the flip side, the agricultural sector, which used to be a leading force, has shrunk by 1.9%, now representing just under 21% of the overall economy. The services sector has also declined similarly. This shift hints at a move among workers from traditionally low-paying jobs to more lucrative sectors.

According to the latest BOK report, this marks North Korea’s highest growth projection since 2016, when the economy grew by 3.9%. Notably, trade with South Korea has decreased dramatically since then, dropping to nearly zero by 2023.

Per capita, North Korea’s economy stands at around $1,239, which contrasts sharply with more than $36,000 in South Korea.

Additionally, South Korea’s Trade Promotion Agency (KOTRA) highlighted that North Korea continues to struggle with a substantial trade deficit.

KOTRA’s analysis indicated that while North Korea relies heavily on China for trade, it has also sought to navigate sanctions by exporting goods like electronics and auto parts to various countries, including India, the Netherlands, Indonesia, and even textiles to Mozambique and Senegal.