Archive for the ‘GDP statistics’ Category

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


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


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


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.


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!).


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


Bank of Korea on DPRK economy in 2013

Friday, June 27th, 2014

The South Korean central bank, the Bank of Korea, publishes an annual summary of the DPRK’s economic performance the previous year. The 2013 report is out. You can also download it on my DPRK Economic Statistics Page.

Here is a summary in Yonhap:

The Bank of Korea (BOK) estimated that the country’s economy expanded 1.1 percent in 2013, slowing from a 1.3 percent on-year expansion in the previous year.

In 2012, the North Korean economy was estimated to have grown at the fastest pace in four years, after contracting 0.9 percent and 0.5 percent in 2009 and 2010, respectively.

A BOK official explained that while the North’s construction sector shrank last year, its agricultural output improved on favorable weather conditions.

An expansion in production of coal and iron ore also lent support to growth, the official added.

Pyongyang’s construction industry contracted 1 percent on-year, compared with a 1.6 percent decline in 2012, as an increase in the number of residential buildings failed to offset falling demand for road construction works.

Its agricultural and fishery industry, which accounts for 22.4 percent of its total output, expanded 1.9 percent last year, slowing from a 3.9 percent growth in 2012.

Growth in its mining and manufacturing industries, which account for 35.7 percent of overall output, gained traction to reach 1.5 percent, up from 1.3 percent a year earlier.

The data, meanwhile, showed that North Korea’s nominal gross national income (GNI) came in at 33.8 trillion won (US$33.3 billion) last year, which is roughly 2.3 percent of South Korea’s 2013 GNI of 1,441.1 trillion won.

The Wall Street Journal’s Korea Real Time notes the following:

“North Korea has neither the capability to collect and analyze all the relevant data necessary to measure its own GDP growth nor the willingness to disclose them to the outside world,” says Mr. Cho.

Marcus Noland published a graph of korean growth rates from 1990-2013 and offered comments on the BOK’s methodology:


And Noland’s comments:

According to the report, BOK constructs its national income account estimates “using basic data on North Korea’s economic activities supplied by relevant institutions…GDP at current prices is estimated with the use of South Korean prices and value-added ratios.”

What this means in non-economist speak is that someone (the NIS?) gathers data using some sources and methods which presumably put an emphasis on physical indicators that are easily countable. So that, as a practical matter, the South Korean authorities may have a better grasp of output in some sectors (like coal, where it’s easy to count railcars leaving a limited number of mines) and less on say services such as education where both the quantity and quality are more difficult to observe. Not surprisingly, the agricultural and industrial sectors of the economy show more output variability than does services. Whether this reflects reality or just problems counting physical indicators for services is unknown.

Then, having obtained these physical measures of output, we need prices and value-added weights to aggregate them into a single measure of the value of output. According to the BOK report they use South Korean prices and value-added weights. There are two problems here, though one problem may be diminishing over time. The first problem is that the relative price structures of the North and South Korea economies are not the same. However, over time it appears that the structure of domestic prices in both economies is getting more like world prices, and hence more like each other. So differing relative prices is probably less of an issue today than say 20 years ago.

Its less clear that the problem is disappearing with respect to the use of South Korean value-added weights that reflect the underlying techniques of production which remain vastly different across the two economies. Bottom line: we know there are some non-trivial problems with using the South Korean data to construct the North Korean GDP estimates.

Rumors have long circulated that the South Koreans either obtained or constructed a North Korean input-output table which they could use for these calculations, and contrary to the statement in the BOK report, weights derived from this source are used to construct the North Korean national income estimates, not the South Korean value-added weights. I personally do not know whether these claims are true or not.

Here is analysis by the Institute for Far Eastern Studies (IFES) (2014-7-4):

Real GDP of DPRK Grows in 2013, Marking Third Consecutive Year

On June 27, 2014 the Bank of Korea announced that North Korea’s real GDP grew 1.1 percent over the previous year (2013). Despite intense sanctions imposed by the international community, North Korea’s GDP grew by 0.8 percent in 2011 and 1.3 percent in 2012, showing that North Korea has been able to maintain a positive GDP growth rate for three years running.

The Bank of Korea’s “Gross Domestic Product Estimates for North Korea in 2013” report identifies favorable weather as a factor in increased agricultural production and higher crop yields, and points to the expanded production of coal, iron and other mineral resources as the keys to North Korea’s extra 1.1 percent growth.

As for individual sectors, crop production increased by 1.1 percent, the mining industry expanded by 2.1 percent, manufacturing by 1.1 percent, utilities (electricity, gas, water) by 2.3 percent, and the service industry expanded by 0.3 percent. On the other hand, due to a decrease in road construction and other public works projects, the construction sector posted a 1.0 percent decrease despite growth in homebuilding.

According to the Bank of Korea, North Korea’s 2013 gross national income (GNI) was 33.8 trillion won, approximately 1/43 of South Korea’s GNI for the same year. Furthermore, it was reported that North Korea’s GNI per capita in 2013 was 1.379 million won, approximately 1/21 of the GNI per capita of South Korea.

The scale of North Korea’s foreign trade (excluding inter-Korean trade) reached 7.34 billion USD (combined imports and exports) in 2013 — a 530 million USD increase over the previous year.

Exports saw an increase of 11.7 percent compared to 2012, reaching 3.22 billion USD, with exports of minerals and textiles seeing the highest increases of 14.4 percent and 31.2 percent, respectively. Imports in 2013 rose to 4.13 billion USD, an increase of 5 percent. Imports of machinery (-6.4 percent) and mineral production equipment (-3.6 percent) saw decreases, but North Korea saw large increases in textile (20.4 percent) and plastic products (27.5 percent) imports in 2013.

In 2013, the scale of inter-Korean trade decreased by 42.4 percent compared to the previous year, totaling 1.14 billion USD. The suspension of the Kaesong Industrial Complex was responsible for 99.7 percent of the decrease.

The Bank of Korea has estimated North Korean economic growth rates annually since 1991 by acquiring preliminary data through various affiliated agencies related to the North’s economic activities. The System of National Accounts (SNA) of the United Nations is used to estimate North Korean growth from the South.


Hyundai Research Institute: DPRK economic report for 2013

Sunday, March 16th, 2014

According to Yonhap:

The North’s per-capita GDP for last year is estimated at US$854, up $39 from a year earlier, according to the report released by the Hyundai Research Institute (HRI), a South Korean private think tank.

The North’s 2013 per-capita GDP amounts to a mere 3.6 percent of South Korea’s per-capita GDP of $23,838 for the same year, it said

North Korea’s grain production improved on the back of favorable weather conditions, while the country also expanded its investment in various industrial sectors, the report said.

The communist state’s grain production is estimated to have grown some 5 percent last year from a year earlier. The country saw an 8.5 percent on-year rise and 10 percent gain in its grain production, respectively, in 2011 and 2012.

Also, the reclusive nation increased its budget spending for railroads, metal and power generation sectors, which contributed in boosting its economy, the report showed.

Trade between North Korea and its strongest ally China jumped 10.4 percent on-year to reach $6.5 billion last year, while inter-Korean trade sank 42 percent to $1.1 billion due to a five-month halt of an jointly run industrial park.

The 2013 inter-Korean trade figure is the lowest since 2005 when the comparable figure was $1.06 billion.

The Kaesong Industrial Complex was shut down in early April 2013 after the North unilaterally pulled out all of its workers at 123 South Korean firms. It reopened in September after Pyongyang agreed not to repeat such a suspension.

Assistance from the international community to the North also dropped 47 percent on-year to reach $63.1 million last year, the report said.

Though the story does not cite the article from which the data is drawn, you can download the original report by the Hyundai Research Institute here (PDF in Korean).

Read the full story here:
N. Korea’s per-capita GDP grows 4.8 pct in 2013: report


Economic gap between the two Koreas

Monday, December 23rd, 2013

According to Yonhap:

Trade and economic levels between South and North Korea remained quite wide last year, data showed Monday, pointing to prolonged lackluster business and economic conditions in the reclusive North.

According to the data by Statistics Korea, South Korea’s total trade volume stood at US$1.07 trillion as of 2012, which is 157 times larger than the North’s $6.8 billion. In particular, the South’s exports came to $547.9 billion, 188.9 times larger than those of the North.

The nominal gross national income (GNI) levels between the two Koreas also remained wide.

The GNI for the South was estimated at 1,279.5 trillion won ($1.21 trillion) last year, 38.2 times larger than the North, the data showed. On a per-capita basis, South Korea’s GNI was 18.7 times larger than that of the North.

South Korea also outperformed the North in infrastructure and other social overhead capital spending.

The South’s road network totaled 105,703 kilometers, which compared with the 26,114 km for the North, the data showed. The South had the power generating capacity of 81.8 million kilowatts a year, which is 11.3 times larger than the North.

The only category that the North outperformed the South was in coal production. It produced a total of 25.8 million tons of coal last year, about 10 times the amount of coal produced by the South, according to the data.

The two Koreas had a combined population of 74.4 million, with the South holding a population of about 50 million, the data showed.

The statistics agency has been providing such information on the North every year since 1995 as a way to provide a glimpse into the economic and industrial conditions of the reclusive country.

Read the full story here:
Trade, economic gaps between 2 Koreas remain wide: data


Bank of Korea publishes DPRK economic statistics

Friday, July 12th, 2013

The Bank of Korea has published its estimated aggregate data on the North Korean Economy for 2012.

You can download the report in English here.

You can download the report in Korean here.

It has been cataloged with previous reports (and many others) on my DPRK economic statistics page.

Here is what Reuters analysis of the data:

North Korea’s economy expanded for a second successive year in 2012, South Korea’s central bank said on Friday, bolstering the claims of new leader Kim Jong-un to be pursuing economic growth alongside strengthening the country’s nuclear deterrence.

The economy of the reclusive and impoverished nation grew 1.3 percent in 2012 as nearly all sectors saw improvement compared to a 0.8 percent annual growth the year before, said the Bank of Korea, one of the few sources of estimates about the economic performance of the North, which does not publish data.

Agriculture, farming and fisheries rose 3.9 percent last year in North Korea on the back of expanded use of fertiliser and an increase in pig and chicken farms, according to the Bank of Korea data, compared to a 5.3 percent growth in 2011.

Livestock farming rose 12.3 percent on an annual basis.

North Korean industrial output and manufacturing both expanded for the first time since 2008 after shrinking for three straight years, rising 1.3 percent and 1.6 percent respectively in 2012 compared to a year ago.

Despite the rise in output, North Korea remains one of the poorest countries on earth and its economy is around a thirtieth the size of industrial powerhouse South Korea.

The Bank of Korea data showed that North Korea’s total trade was worth $6.81 billion in 2012, with exports up an annual 3.3 percent, mostly on the back of chemical products and animal products. Imports were up 10.2 percent.

Trade with South Korea, which the Bank of Korea exempts from North Korea’s trade statistics, was worth $1.97 billion dollars last year, up 15 percent from a year ago. Almost all of that trade comes from the closed Kaesong industrial park.

Here is coverage by the Institute for Far Eastern Studies (IFES):

The Bank of (South) Korea released a report on the economic growth estimation of North Korea in 2012. North Korean economy recorded positive growth for two consecutive years. Per capita gross national income (GNI) rose by 2.7 percent to 1,371,000 KPW against the previous year. However, the gap between the South and North has not narrowed.

Last year, North Korea’s gross domestic product (GDP) growth was estimated to be 1.3 percent. This is the highest level since the financial crisis of 2008 when it surpassed the South Korean economic growth and reached the 3.1 percent growth.

Agricultural production improvement as well as international aid in heavy oil in 2008 permitted the North Korean economy to rebound brieflybut it began to decline resulting in minus growth in 2009 (-0.9 percent), 2010 (-0.5 percent), and 2011 (0.8 percent).

Agriculture, forestry and fishery industries last year made robust growth as well as manufacturing, engendering the boost in the economy. The construction of the Huichon Power Station was completed last year and it is considered to have attributed to the improvement in the power situation.

In terms of industries that accounted for the growth, agriculture, forestry and fishery made up about 23.4 percent of the nominal GDP, recording a production increase by 3.9 percent. Production of livestock such as swine and poultry husbandry rose by 12.3 percent and rice and corn production also increased due to improved fertilizer supply.

Production in manufacturing (21.9 percent of North Korean GDP) made a 1.6 percent increase. The rate of manufacturing production increased by 2.6 percent in 2008 but began to decline from 2009 at -3.0 percent; 2010, -0.3 percent; and 2011, -3.0 percent.

Production improved in food, tobacco and light industries by 4.7 percent, and heavy chemical industries rose by 0.2 percent. Mining (14 percent of GDP) also rose by 0.8 percent due to improvement in coal production. Electricity, gas and water supply (3.5 percent of GDP) also increased by 1.6 percent from the expansion of hydroelectric and thermal power generation. Service industry (29.4 percent of GDP) rose by 0.1 percent. Government services dropped by 0.2 percent but transportation and communication, wholesale and retail, food and lodging services increased by 2.0 and 2.2 percent, respectively. However, construction (7.8 percent of GDP) fell by 1.6 percent due to the decrease in the civil construction such as road works.

Last year, North Korea’s gross national income (nominal GNI) was estimated to be 33.5 trillion KPW. Compared to South Korea’s 1.28 quadrillion KRW, this is a ratio of about 1 to 38.2. By dividing the GNI by North Korean population, per capita gross national income is calculated to be 1,371,000 KRW. Compared to South Korea’s (25,589,000 KRW) it is 1 to 18.7. This is comparable to the figures recorded in 2011 (1 to 18.6).

North Korea’s foreign trade volume (based on only import and export excluding the inter-Korean trade) increased 7.1 percent to 6.81 billion USD. North Korea’s exports (2.88 billion USD) increased by 3.3 percent, mainly in chemical products (38.0 percent) and animal products (23.6 percent). As for imports (3.93 billion USD), textiles (17.6 percent) and transport equipment (6.2 percent) increased by 10.2 percent.

Last year, the size of trade between North-South Korea rose by 15.7 percent over the previous year at 1.97 billion USD. Import and export to and from the Kaesong Industrial Complex accounted for 99.5 percent of the total amount. North Korea’s export increased 12.1 percent — mainly machinery (28.2 percent) and electrical and electronic equipment (16.1 percent) — and imports to South Korea increased by 17.5 percent — electrical and electronic products (25.8 percent) and textiles (12.8 percent).

Here is additional coverage in the Wall Street Journal‘s Korea Real Time, Bloomberg, Straits Times, Foreign Policy.

Read the full stories here:
North Korea posts 2nd successive year of growth-Bank of Korea
Christine Kim