Archive for the ‘GDP statistics’ Category

North Korea’s economic growth in 2019

Monday, December 28th, 2020

By Benjamin Katzeff Silberstein

‘Tis the season for South Korean government estimates on North Korea’s economic growth… Maeil Business News

The North Korean economy grew for the first time in three years in 2019 following a sharp contraction in the previous two years, but its per capita income gap with South Korea widened further, the South Korean government data found.

According to a report released by Statistics Korea on Monday, the nominal gross domestic production (GDP) in North Korea rose 0.4 percent last year from the previous year to 35.3 trillion won ($32.2 billion). The growth came after the economy had shrunk 3.5 percent in 2017 and 4.1 percent in 2018 due to the poor crop yields and strengthened international sanctions.

South Korea’s nominal GDP in 2019 was 1,919 trillion won, 54 times greater than that of the North.

The statistics bureau said the increased output from construction, agriculture, forestry and fisheries and service sectors contributed to the overall economic growth of the reclusive regime.

North Korea’s per capita gross national income (GNI) was 1.41 million won last year, losing 20,000 won from 2018. It was one twenty-seventh of South Korea’s 37.44 million won. The per capita income gap between South and North Korea widened from 21 times in 2009, 23 times in 2015 and 26 times in 2018.

Crop yields in North Korea came at 4.64 million tons in 2019, higher than 4.38 million tons in the South. But the North’s rice output was 2.24 million tons, about 60 percent of that of the South.

Coal production increased 11.8 percent on year to 20.21 million tons last year.

North Korea’s trade volume totaled $3.24 billion in 2019, up 14.1 percent from the previous year when its trade shriveled 48.8 percent due to the United Nation’s sanctions.

Watches and watch components that are not subject to the sanctions accounted for the biggest share of 17.8 percent of its total exports, up 57.9 percent from the previous year.

Its biggest imports were mineral fuel and oil that took up 11.7 percent. Amid food shortage, grain imports soared 242 percent on year.

(Source: Choi Mira, “North Korean economy grows for first time in 3 years, per capita income falls in 2019,” Maeil Business News, December 28th, 2020.)

A few thoughts:

First of all, these are estimates based on models, not on rigorously gathered statistical data. That is not to criticize the statistical authorities that compile these figures, but it must be mentioned. These may well be the best estimates out there.

Second, a 0.4% growth is not much, especially considering the steep economic fall North Korea went through in the preceding years. News headlines tend to blow these figures up way beyond proportion.

Third, 0.4% does sound like a plausible number in many ways. Some of the metrics used to determine it may well be indicative of other things. Take increased coal production, for example. We know with a fair degree of certainty that (illicit) coal exports to China seem to have increased significantly during 2019, as well as during the present year. So an almost 12% increase in production compared to 2018 is not at all difficult to imagine.

So all in all perhaps a small uptick in 2019, but at the same time, from a very low level.

Share

North Korea’s economic contraction in 2018: what the BoK numbers tell us

Friday, July 26th, 2019

By Benjamin Katzeff Silberstein

The Bank of Korea has released its yearly estimate of North Korea’s economic trends for last year. The estimate gives a contraction of the economy by 4.1 percent. Reuters/Channel News Asia:

North Korea’s economy shrank in 2018 for a second straight year, and by the most in 21 years, hit by international sanctions to stop its nuclear programme and by severe drought, South Korea’s central bank said on Friday (Jul 26).

North Korea’s gross domestic product (GDP) contracted by 4.1 per cent last year in real terms, the worst since 1997 and the second consecutive year of decline after a 3.5 per cent fall in 2017, the South’s Bank of Korea estimated.

North Korea does not disclose any statistics on its economy. The South Korean central bank has been publishing its estimates since 1991, based on information from various sources including the South’s foreign trading agencies.

North Korea’s international trade fell 48.4 per cent in value in 2018 as tougher international sanctions in late 2016 and 2017 cut exports by nearly 90 per cent, the Bank of Korea said.

Output in the mining sector shrank 17.8 per cent because of sanctions on exports of coal and minerals, while the agriculture, forestry and fisheries sector contracted by 1.8 per cent because of drought, it said.

North Korea’s population was estimated at 25.13 million and annual income per head at S$1,298, the South Korean central bank said.

Article source:
North Korea’s economy shrinks most in 21 years in 2018: South Korea
Reuters/Channel News Asia
2019-07-26

I won’t go into much depth on the methodological issues with all this, but suffice to say that because Bank of Korea doesn’t release much information on their models, estimates, assumptions and the like, their analysis is always difficult to evaluate. That’s why it’s not particularly helpful to state that it’s the lowest growth (or largest contraction) since 1997. That may be true, but proportions aren’t necessarily all that relevant or accurate here.

That said, broadly, the estimate makes sense. In fact, it may be a slight lowball estimate. South Korean economist Kim Byung-yeon put estimated a 5-percent contraction for 2017, which sounds more reasonable to me.

The BoK estimate of the mining sector is particularly interesting. They give a contraction of 17.8 percent of the sector as a whole for 2018, after claiming in 2017 that it shrank by 11 percent. On the one hand, it’s interesting to think about how all this might look domestically. This would mean that around 70 percent of the mining sector which operated in 2016, continues to operate today. So what’s happening with all that coal, and all those minerals? Well, we get a hint of that in the estimates for electricity generation and water. This was down by -2.9 percent in the estimate for 2017.

Now, the estimate instead gives an increase of 5.7 percent. This positive effect for domestic electricity generation has been anecdotally reported by outlets such as Daily NK for quite a while. Cheaper electricity has made supply much better in parts of the country. This is a relatively minor positive, as the revenue loss from decreased exports is much greater. Nonetheless, there may be a slight impact here of cheaper electricity cushioning some of the lower demand for industrially manufactured goods.

Here’s a graph comparing the 2017-2018 estimates, based on the BoK data (which you can find here).

Bank of Korea estimates of North Korean GDP growth, by sector, 2017 and 2018. Graph by NK Econ Watch.

It’s also important to bear in mind that the baseline here was fairly high. North Korea has experienced a few years of solid economic trends, so a negative growth of four percent isn’t necessarily catastrophic. Of course, it’s very bad, but there are more nuances to these things than full stability or complete disaster.

Share

North Korea’s economic growth – from Pyongyang’s perspective

Monday, October 15th, 2018

By Benjamin Katzeff Silberstein

Has North Korea’s economy been growing under sanctions? That’s what an economist in Pyongyang claims. In a recent interview with Kyodo (published here by Japan Times), Ri Gi Song at Pyongyang’s Institute of Economics at the Academy of Social Sciences, claimed that North Korea’s GDP per capita grew by 3.7 percent in 2017, a year during which the country was virtually banned from selling its most crucial export goods, and faced very harsh conditions for importing crucial resources such as oil and fuel. When factoring in population growth, the GDP-growth-figure diminishes somewhat to 3.2% (see below), but it’s still firmly in the same range.

Strange as it may sound, it is possible to imagine that North Korea’s economy wouldn’t contract severely during a year of sanctions. GDP growth alone is a poor way of measuring long-run, sustained economic growth and progress. While it may sound counter-intuitive, the sanctions, while depressing the economy in certain ways, may have boosted it through other mechanisms. The ban on coal imports from North Korea, for example, may well have boosted certain industries, as this blog has covered in the past. Because exports have dwindled drastically, the price at which North Korean coal can sell – domestically as well as internationally – gets much, much lower than when it could be sold in greater quantities on a somewhat competitive market. So with lower prices for factors of production, industry could certainly experience growth in the short-run. But this would only be a temporary and meaningless boost, since the losses from unsold goods abroad would be much greater.

In other words, Ri may be partially right, but numbers are also likely inflated for political reasons. Here’s an excerpt from the interview, annotated with comments:

North Korea’s economy grew 3.7 percent in 2017, a professor of a think tank in Pyongyang said in brushing aside the view that the country has faced an economic contraction against a backdrop of international sanctions.

Even though North Korean economic data has become somewhat more public and plentiful in the past few years, there are still undeniable political imperatives in publishing data that makes the country appear resilient in the face of sanctions. After all, if sanctions aren’t “working” (whatever that may mean), what’s the point in keeping them? That, of course, doesn’t mean that such figures are accurate, wholly or partially.

Ri Gi Song, a professor of the Institute of Economics at the Academy of Social Sciences, said in a recent interview with Kyodo News that North Korea has achieved economic expansion without depending on other nations.

Well, he would say that, since that is how Juche is spoken. That doesn’t mean it comes from a place of literal belief; it’s simply what you say if you’re a North Korean economist speaking from your official position, and shouldn’t be read as an expression of delusion or the like.

Ri said gross domestic product totaled $30.70 billion in 2017, up from $29.60 billion in 2016. It is very rare for North Korea to disclose its GDP and also the first time that the country’s GDP data in the past two years have been unveiled.

But it is impossible to verify the accuracy of the figures, as the professor did not make public other economic indicators such as consumer spending, investment and inflation rate.

Although a report released by South Korea’s central bank showed in July that the North’s economy shrank 3.5 percent in 2017 from the previous year, Ri shrugged it off, saying Seoul’s calculation is “only an estimation.”

Ri is right that South Korea’s figures are only estimates, albeit careful ones based on models developed and refined (presumably) through years of experience. But the thing is, Ri’s official North Korean figures, too, are only an estimate. Even in the best of situations, no GDP-figure is exactly certain and precise. To calculate as vast of an “object” as a country’s economy, some assumptions inevitably have to be made. One of them is that various forms of reporting is generally accurate.

In the case of North Korea, however, this problem is incomparably worse than in open, democratic free market-economies. Let’s assume for a moment that the North Korean government genuinely is eager and willing to generate real, trustworthy and truthful economic statistics, which in many ways does seem to be the case. Even so, how do you generate accurate accounts reporting in an environment when the going principle for a long time has been that planning targets must be met regardless of actual conditions? And with so many different forms and models of enterprise in action throughout the country, seemingly with little but perhaps improving consistency across the board, how would it be reasonable to expect the North Korean government to be able to calculate a reasonable GDP-figure? That’s not even getting started on the investments-portion, a crucial variable to determine growth. Private investments into partially private enterprises is still technically illegal in North Korea, but there are many signs to suggest that it’s taking place on an increasingly substantive scale.

So, even if the North Korean government’s statistical authorities have all the right intentions, I don’t envy their working conditions one bit.

He said North Korea’s population grew to 25,287,000 last year from 25,159,000 in 2016. Based on the figures, the country’s per capita GDP stood at $1,214 last year, equivalent to that of Myanmar.

This means that the actual growth rate claimed by Ri, factoring in population growth, is 3.2%. This, however, still isn’t the “real” growth rate. To get those numbers, we’d need to factor in inflation, and no reliable numbers are available to let us do that. But on the face of it, judging by the price trends for foreign currency and rice through 2016–2017, inflation wasn’t visibly large or out of the ordinary. Even so, we simply don’t know.

In an attempt to overcome the negative impact of international economic sanctions, North Korea has “developed various technologies” under the spirit of “self-reliance,” Ri said, adding the nation has implemented measures to save the utilization of crude oil, for example.

This is certainly true to an extent. Just look at the masses of North Koreans purchasing solar panels for electricity rather than relying on scantly available government supplies of power. And as mentioned above, there is some sense in this argument, if interpreted in a slightly broader manner, that North Korea’s economy may have experienced some gains in efficiency from sanctions, as people are forced to find new, creative ways to get around increasingly tricky conditions. And industry may have gotten a boost from lower energy prices, as may other consumption, since citizens can theoretically spend more on other items if energy prices fall.

Still, this boost would only be marginal, and temporary at best. It certainly wouldn’t create 3.2 percent growth rates, although it might have contributed.

[…]

Ri acknowledged that North Korea has suffered food shortages, but emphasized that the heavy and light industries as well as the chemical sector have been growing and electric power conditions have been improving.

Amid a thaw in inter-Korean relations, Ri expressed hope for economic cooperation with the South.

Full article:
North Korea’s economy grew 3.7% in 2017, Pyongyang professor estimates
Japan Times/Kyodo
2018-10-13

At the end of the day, as Andray Abrahamian points out, neither North nor South Korea publishes their methodology for calculating North Korea’s growth rates, so all we can do is speculate about the assumptions that go into the models.

Share

What North Korea’s 2017 budget report and 2018 projections tell us about its economy

Monday, April 16th, 2018

By Benjamin Katzeff Silberstein

What could be better on a rainy Sunday (at least for those of us on the U.S. east coast) than to delve a little deeper into North Korea’s 2017 budget reporting? I don’t have as much time as I would wish at the moment to give the topic the attention it deserves, so I would advise readers who wish to do more research on their own to use Ruediger Frank’s previous writing on the topic as a guide to making sense of the most recent budget report (see, for example, here, and here), in combination with information about the budget report itself.

Before delving into some points from the report, here’s the usual mantra about figures from North Korea: numbers should never be taken as exact, and their reliability is sketchy at best. It is impossible to tell for sure what is propaganda and what is actual, realistic information, and all figures should be taken as indicative only.

With that out of the way, here are some observations, in no particular order:

The economy has grown, according to North Korea’s own figures, but by less than previous yearsThat is, if you take Ruediger Frank’s view that growth of state budget revenue is a proxy for overall economic growth, which went up by 4.9 from the previous year. This is significantly lower than the past few year’s estimates and results, so in a way, it’s an admission of a real decrease in economic performance. Thus, it is an admission of sorts that the economy isn’t doing all that well at the moment. There are several potential reasons for this figure (which, again, may not even be true or accurate). Recall that exports only started dropping in any drastic sense from early fall last year, when Chinese sanctions enforcement began.

For 2018, the “envisaged” growth rate is much lower, at 3.2 percent. Perhaps this, too, is overtly optimistic given how difficult things seem at the moment. Or perhaps it’s a realistic anticipation of a real downturn, but no disaster.

The budget report recognizes that a significant share of economic activity occurs out of the central government’s handsThough North Korean publications do not explicitly recognize private economic activity, they’re less and less shy about talking quite openly about key facets of the marketized system. Frank pointed out previously, for example, that budgetary items such as revenues from provinces, according to some, essentially represent incomes from the non-centrally planned share of the economy. If this interpretation is correct, over a quarter of economic production (26.1%) is openly admitted by Pyongyang to be out of central planning hands. The share may well be more than the double of that in reality, depending on how you count. In any case, the budget report – and this isn’t new at all, I should point out – recognizes that a significant share of the economy is out of central government hands: “[…] 도,시,군들에서 자체의 수입으로 지출을 맞추고 많은 자금을 중앙예산에 들여놓을것으로 예견하였다 (Provinces, cities and counties are expected to balance expenditure with their own revenue and contribute lots of funds to the central budget)”.

The state foresees continued growth from private and semi-private enterprise revenue next yearTo see why, consider two budget posts that may appear especially peculiar for a nominally socialist economy: the social insurance fee (사회보험료수입금) and the real estate rent (부동산사용료수입금). The income from the former is expected to grow by 1.2 and 1.8 percent respectively. Revenues from the transaction tax (거래수입금) anticipated to grow by 2.5 percent. These, too, have been mentioned in previous budget reports so their appearance per se is not new. Information about what exactly they are is rather tricky to come by, and I’m grateful to my good friend and colleague Peter Ward for sending me excerpts from a 2010 North Korean dictionary (광명백과사전) on the social insurance and real estate rent fees.

The social insurance fee, basically, is just what it sounds like: a fee charged from “socialist organs and factories” as well as individual worker’s earnings, to help guarantee a decent life for “people who loose their ability to work [로동능력을 잃은 사람]” as well as the elderly and others in need. The real estate usage fee is explained as a revenue from “socialist organs and factories” charged in order for the government to maintain the quality and standard of its property, i.e., its buildings and land (which technically is all the land and all the buildings in the country). In other words, this is a fee charged to enterprises in a general sense, it seems. Both the social insurance fee and the real estate usage fee are probably best thought of as general revenue streams for the government, rather than income later used for a specific purpose. The transaction tax was first mentioned in the budget report for 2011, and is most likely a form of general tax on enterprise activity.

Again, these revenue flows are not new, and neither is their reporting. But fact that these revenue channels are institutionalized parts of the official economy say something about how far North Korea has gone from the Stalinist economic model, even nominally speaking. In a fully planned economy, there would be no need for fees or taxes (and indeed, North Korea claims to be a tax-free society) because all production would be planned, and its results collected in full and distributed by the state. Fees and taxes are only necessary when economic production occurs outside of state hands, which likely about half or more of economic activity in North Korea does.

Conclusion

No reader should take this post to mean that the North Korean economy is doing well, improving, or remains untouched by sanctions. Politically, it would likely be very tough for the state to report a major downturn in a year of such scaled-up sanctions and international pressure. But the overall assessment, that things are getting tougher but are not yet catastrophic in any way, may well be accurate. The question is how long it can go on this way, and it seems to me that economic projections for 2018 may well be more optimistic than they should be. Of course, with China’s sanctions enforcement reportedly letting up in some respects, there might be more cause for optimism than we realize.

Share

North Korean GDP per capita over $1,000 for the first time ever last year, says Hyundai

Tuesday, October 4th, 2016

By Benjamin Katzeff Silberstein

Someone once said that if anyone ever gives you a number on anything related to the North Korean economy and they include a decimal, you can be sure that they are wrong. This almost certainly holds true for the GDP estimates for North Korea that come out every year.

Earlier this year, South Korea’s Bank of Korea estimated that North Korean GDP had contracted by 1.1%, for the first time since 2010. Now, Hyundai Research Institute claims that nominal GDP per capita in fact went above $1,000, putting North Korea roughly on the same level as South Korea in the mid-1970s. Unless North Korea’s population declined very suddenly and drastically during the last year (which it didn’t, of course), both claims cannot hold true at the same time. I am personally more inclined to believe the directionality (though not necessarily the exact figure) of Hyundai’s estimate:

North Korea’s gross domestic product (GDP) per capita surpassed US$1,000 for the first time last year despite heavy sanctions imposed following a series of nuclear and missile tests, a Seoul-based think tank said Thursday.
Hyundai Research Institute estimated North Korea’s nominal GDP per capita at $1,013 in 2015, up from $930 from the previous year, based on its own income analysis model.

The reclusive state’s nominal GDP reached $986 in 1987, but has since declined to around $650 in the early 2000s.

According to the Food and Agriculture Organization of the United Nations (FAO), the North produced 4.78 million tons of crops in 2015, a 10.7-percent fall from a year earlier, due to severe drought. The price of rice per 1 kilogram surged 5.6 percent on-year to 5,200 won (US$4.73).

Trade with China was valued at $5.71 billion won last year, down 16.8 percent from 2014, mainly due to a drop in the North’s exports of natural resources to its largest trading partner.

In contrast, inter-Korean trade rose 15.6 percent on-year to $2.71 billion in 2015, the institute said.

The international community’s aid to Pyongyang was tallied at $31.87 million last year, up 12.4 percent from a year ago, but less than 2011’s $97.11 million, it noted.

The research institute evaluated the communist state’s economic power is equivalent to that of South Korea in the mid-1970s.

North Korea’s per-capita GDP lags far behind of other Asian nations, including China ($7,990), Vietnam ($2,088) and Laos ($1,799). It is even below other underdeveloped countries, such as Bangladesh ($1,287) and Myanmar ($1,292), according to the institute.

“North Korea’s current economy is not capable of standing alone,” said Kim Cheon-koo, a researcher at Hyundai Research Institute. “The wide income gap between South and North Koreas is expected to create massive costs for reunification.”

Full article here:
N. Korea’s per-capita GDP tops US$1,000 in 2015: report
Yonhap News
2016-09-29

Share

How North Korea Became the World’s Worst Economy

Tuesday, December 29th, 2015

Nicholas Eberstadt writes in the Wall Street Journal:

Economic history is a story of progress and success, but also of retrogression and failure. Among the latter cases, the most gruesome is surely the Democratic People’s Republic of North Korea (DPRK). Its signature catastrophe, the Great North Korean Famine of the 1990s, was, so far as can be told, the only famine in all of human history to beset an urbanized and literate society during peacetime.

Pyongyang’s descent into penury is all the more tragic considering that from the 1950s on into the 1970s, intelligence from Washington and Seoul suggested that North Korea’s per capita output was higher than South Korea’s. An array of public data—on urbanization and energy consumption, for instance—appears to corroborate that judgment. How the once-developing DPRK went from a rapid ascent into a stall, and then into a dreadful downward spiral, is a cautionary tale with implications far beyond the Korean peninsula.

The ruling Kim regime suppresses data about the country’s performance, but sufficient hard evidence has seeped out to describe both the dimensions and the causes of its continuing economic calamity. The most meaningful quantitative measure available comes from “mirror statistics” on the country’s international trade—reports by its trading partners on their purchases from and sales to the DPRK of various commodities. These data provide indirect but powerful evidence about productivity, living standards and technological attainment.

Despite a recent China-supported upswing in trade, North Korean per capita merchandise exports last year were no higher, after adjusting for inflation, than in the mid-1970s. By my calculations, real per capita imports in 2014 were barely three-fifths of what they were in 1974. That year marked North Korea’s all-time peak trade.

North Korea’s decline was a continuing drama, not precipitated by any particular geopolitical shock. Neither the end of the Soviet bloc, nor the reportedly disastrous flooding of the mid-1990s, nor a succession of international non-proliferation sanctions imposed since 2006, nor any other external event explains the country’s long-term deterioration. Instead, North Korea’s economic troubles are the natural consequence of the Kims’ dogged insistence on destructive policies.

North Korea appears to have the very worst business climate of any fully functioning nation state. On the 2010 Index of Economic Freedom compiled by the Heritage Foundation and The Wall Street Journal, the DPRK earned one point out of 100, the lowest score of all 179 countries ranked. Zimbabwe, the state with the second-worst ranking that year, came in 20 points higher.

The DPRK has no rule of law; no established property rights; no possibility for private foreign trade; no reliable currency; virtually no official social and economic information; and no internal constraints whatever upon its monumentally ambitious government.

It is difficult to overstate how much this matters. At any point in the postwar era, 80% or more of the differences between countries in per capita GDP can be predicted by human resources plus business climate (i.e., institutions and policies). Statistical analysis of North Korean trade underscores the point. In 2010 the DPRK’s global trade was only 1/20th of what we would expect for a country with its estimated human resources profile. However, when business climate is considered, North Korea no longer looks like an outlier at all.

In 1970 North Korea apparently did a better job than China or Vietnam of converting human resources into economic output. But those two countries would pursue “reform socialist” policies, including freeing up agriculture, encouraging private enterprise and promoting international trade. North Korea went in the opposite direction, shifting to a permanent war-footing economy, systematically eradicating the consumer sector, and repeatedly confiscating any outstanding cash in private hands through “currency reforms.” Simply put: Any economy that embraced the same disastrous rules as the DPRK should be expected to trace out a similar trajectory of economic failure.

There is one final, and particularly bitter, piece in the puzzle: the role of foreign aid in financing and ultimately facilitating North Korea’s ruin. Mirror statistics reveal that the DPRK has never been self-supporting. To the contrary, it has relied on a perennial inflow of foreign resources to sustain itself. Since 1960, North Korea has reportedly received more than $60 billion (in today’s dollars) more merchandise from abroad than it has shipped overseas. Nearly $45 billion of that came from Beijing and Moscow—a figure we can treat as a rough approximation of total Chinese and Soviet/Russian financial support.

Why didn’t these massive transfers result in any appreciable measure of long-term economic advancement? The work of economists Craig Burnside, David Dollar and Lant Pritchett, published in the late 1990s under the aegis of the World Bank, suggests an answer: Aid can have a negative effect on growth when a recipient state has a bad business climate, because foreign subsidies allow the regime, in the short term, to escape the consequences of its misrule. In such cases, the greater the volume of aid, the bigger the harm.

Unfortunately, North Korea’s horrific economic performance was enabled in part by leaders abroad who sent billions of dollars to Pyongyang. Those resources allowed the Kim dynasty to continue policies so patently destructive that they would have been forced to cease, or at least to moderate, them absent subsidy from overseas.

International aid workers and humanitarian policy makers have always feared that foreign assistance, through cascading mishaps, might leave recipients poorer and worse off in the end. North Korea, bankrolled mainly by Moscow and Beijing, has gone further than any other modern state in turning this nightmare scenario into reality.

Read the full story here:
How North Korea Became the World’s Worst Economy
Nicholas Eberstadt
2015-12-29

Share

Economic gap between two Koreas widens in 2014

Tuesday, December 15th, 2015

According to Yonhap:

The economic gap between South and North Korea widened in 2014, with the difference in their trade volumes remaining far apart, government data showed Tuesday.

According to data by Statistics Korea, North Korea’s nominal gross national income (GNI) came to 34.23 trillion won (US$28.93 billion) in 2014, with that of the South hitting 1,496.6 trillion won, or roughly 44 times larger.

GNI is the total value that is produced within a country, which is comprised of the gross domestic product along with income obtained from other countries such as dividends and interest earnings.

In 2013, South Korea’s GNI was 42.6 times larger than the North’s.

On a per-capita basis, South Korea’s GNI came to 29.7 million won, 21 times more than that of its northern neighbor, which stood at 1.39 million won. The difference widened slightly from the 20.8 times more tallied in 2013.

In addition, South Korea’s economy advanced 3.3 percent in 2014, compared to 1 percent for North Korea.

On other fronts, as of the end of 2014, South Korea had a total population of 50.42 million compared to the North’s 24.66 million, according to the data.

South Korea also continued to greatly outperform the communist North in trade.

In 2014, South Korea’s overall trade volume came to a little under $1.1 trillion, 144 times larger than North Korea’s $7.6 billion.

South Korea’s overall energy output capacity reached 93.21 million kilowatts, 13 times larger than the North’s 7.25 million kilowatts, while in the area of rice production the South had a two-to-one advantage. In 2014, Seoul’s total rice production reached 4.24 million tons versus 2.15 million tons for Pyongyang.

In the mining and manufacturing sector, the South had a seven-fold lead in cement production, while in steel the gap was even greater, with South Korea’s output being 59 times larger than that of the North.

The two Koreas also showed significant gaps in social infrastructure.

South Korea’s road network totaled 105,673 kilometers compared with the North’s 26,164 kilometers.

The statistics office has been publishing general information on the North since 1995 as a way of providing insight into the economic and social conditions of the reclusive country.

The two Koreas technically remain at war, since the 1950-53 Korean War ended with only a ceasefire, not a peace treaty.

Read the full story here:
Economic gap between two Koreas widens in 2014: data
Yonhap
2015-12-15

Share

North Korea’s “Epic Economic Fail” in International Perspective

Wednesday, November 11th, 2015

A new report by Nicholas Eberstadt has been published by the Asan Institute for Policy Studies. According to the summary:

This report brings to the table new research on the dimensions of economic failure in modern North Korea, offers a quantitative view of how nations develop in our modern world, and where North Korea’s awful slide downward fits within this global tableau; offers admittedly approximate long term estimates of overall net resource transfers to the DPRK, including estimates of net transfers from the major state benefactors; and some indications about the interplay between concessionary resource transfers from abroad and the DPRK’s domestic economic performance. It concludes with some observations about the implications of these findings

You can download a PDF of the report here.

Share

Bank of Korea on the DPRK’s economic performance in 2014

Friday, July 17th, 2015

The Bank of Korea has published its annual assessment of the North Korean economy. The report on economic performance in 2014 can be downloaded here (PDF).  Previous years’ reports can be downloaded from my economic statistics page.

The report claims that the DPRK’s GDP increased by 1% in 2014. Nominal GNI was valued at 34.2 trillion KRW, (2.3% of South Korea). GNI per capita stood at 1.388 million KRW, (4.7% of South Korea).

Growth a number of industries was positive, but had fallen from 2013 rates. Among these industries were mining, as wells as agriculture, forestry, and fishing (combined) and heavy industry and chemical industry (combined).  Growth in light industry was higher than in 2013 as was electricity, gas and water (combined) and services. The biggest annual turnaround came in the construction industry, which saw a growth rate of 1.4% following a -1% fall in 2013.

The volume of North Korea’s external trade (sum of exports and imports of goods, excluding inter-Korean trade) amounted to $7.61 billion dollars in 2014 (up $0.27b from 2013). Exports totaled $3.16 billion (down 1.7% from 2013). Imports totaled $4.45 billion (up 7.8% from 2013).

Here is coverage in Yonhap:

North Korea’s economic growth is estimated to have slowed last year from a year earlier as its staple primary industries posted tepid performances, data showed Friday.

The North’s economy is projected to have expanded 1 percent in 2014, decelerating from the 1.1 percent on-year growth in the previous year, according to the data compiled by South Korea’s central bank, the Bank of Korea (BOK).

It has posted economic expansions for four years in a row since it contracted 0.9 percent and 0.5 percent in 2009 and 2010, respectively.

The BOK explained that the North’s construction sector lent support to the overall growth, bouncing back to a 1.4 percent on-year growth last year from a 1 percent fall the previous year.

Pyongyang’s agricultural and fishery industry, which accounts for 21.8 percent of its total output, expanded 1.2 percent last year, slowing from 1.9 percent growth in 2013.

Growth in its mining and manufacturing sector, which accounts for 34.4 percent of overall output, gained 1.1 percent, down from 1.5 percent a year earlier.

The data, meanwhile, showed that North Korea’s nominal gross national income (GNI) came in at 34.2 trillion won (US$29.8 billion) last year, which is roughly 2.3 percent of South Korea’s 2014 GNI of 1,496.6 trillion won.

Since 1991, the BOK has been releasing the growth estimate of the North based on data provided by Seoul’s intelligence agency and other institutions specializing in North Korean studies.

Here is coverage in Bloomberg (with carts!).

http://www.bloomberg.com/news/articles/2015-07-17/north-korea-grew-1-in-2014-is-south-s-best-guess

Share

Economic gap between Koreas grew in 2013

Tuesday, December 16th, 2014

According to Yonhap:

The economic gap between South and North Korea widened in 2013 with the difference in their trade volumes remaining far apart, data showed Tuesday.

According to the data from Statistics Korea, North Korea’s nominal gross national income (GNI) came to 33.84 trillion won (US$30.87 billion) in 2013 with that of the South coming to 1.44 quadrillion won, or 42.6 times larger.

In 2012, South Korea’s GNI was 38.2 times larger than the North’s.

On a per-capita basis, South Korea’s GNI came to 28.7 million won, 20.8 times that of North Korea.

As of the end of 2013, South Korea had a total population of 50.22 million compared to the North’s 24.54 million, according to the data.

South Korea also continued to greatly outperform the communist North in trade.

In 2013, South Korea’s overall trade volume came to about $1.07 trillion, 146 times larger than North Korea’s $7.3 billion.

South Korea’s overall rice production came to 4.23 million tons, while the North produced about 2.1 million tons.

The two Koreas also showed significant gaps in social infrastructure.

South Korea’s road network totaled 106,414 kilometers, compared with the North’s 26,114 kilometers.

The statistics office has been publishing general information on the North since 1995 as a way of providing an insight to the economic and social conditions of the reclusive country.

Additional reporting here.

Read the full story here:
Economic gap between two Koreas widens in 2013: data
Yonhap
2014-12-16

Share