North Korea: Economy#
North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment, shortages of spare parts, and poor maintenance. Large-scale military spending draws off resources needed for investment and civilian consumption. Industrial and power outputs have stagnated for years at a fraction of pre-1990 levels. Frequent weather-related crop failures aggravated chronic food shortages caused by on-going systemic problems, including a lack of arable land, collective farming practices, poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel.The mid 1990s were marked by severe famine and widespread starvation. Significant food aid was provided by the international community through 2009. Since that time, food assistance has declined significantly. In the last few years, domestic corn and rice production has been somewhat better, although domestic production does not fully satisfy demand. A large portion of the population continues to suffer from prolonged malnutrition and poor living conditions. Since 2002, the government has allowed informal markets to begin selling a wider range of goods. It also implemented changes in the management process of communal farms in an effort to boost agricultural output.
In December 2009, North Korea carried out a redenomination of its currency, capping the amount of North Korean won that could be exchanged for the new notes, and limiting the exchange to a one-week window. A concurrent crackdown on markets and foreign currency use yielded severe shortages and inflation, forcing Pyongyang to ease the restrictions by February 2010. In response to the sinking of the South Korean warship Cheonan and the shelling of Yeonpyeong Island in 2010, South Korea’s government cut off most aid, trade, and bilateral cooperation activities, with the exception of operations at the Kaesong Industrial Complex. North Korea continued efforts to develop special economic zones and expressed willingness to permit construction of a trilateral gas pipeline that would carry Russian natural gas to South Korea. North Korea is also working with Russia to refurbish North Korea’s dilapidated rail network and jointly rebuilt a link between a North Korean port in the Rason Special Economic Zone and the Russian rail network.
The North Korean government continues to stress its goal of improving the overall standard of living, but has taken few steps to make that goal a reality for its populace. In 2013-14, the regime rolled out 20 new economic development zones - now totaling 25 - set up for foreign investors, although the initiative remains in its infancy. Firm political control remains the government’s overriding concern, which likely will inhibit changes to North Korea’s current economic system.
Economic Facts#
| GDP (purchasing power parity) | $40 billion (2014 est.) $40 billion (2013 est.) $40 billion (2012 est.) note: data are in 2014 US dollars; ++ North Korea does not publish reliable National Income Accounts data; the data shown are derived from purchasing power parity (PPP) GDP estimates for North Korea that were made by Angus MADDISON in a study conducted for the OECD; his figure for 1999 was ex |
|---|---|
| GDP (official exchange rate) | $28 billion (2013 est.) |
| GDP - real growth rate | 1% (2014 est.) 1.1% (2013 est.) 1.3% (2012 est.) |
| GDP - per capita (PPP) | $1,800 (2014 est.) $1,800 (2013 est.) $1,800 (2012 est.) note: data are in 2014 US dollars |
| Gross national saving | NA% |
| GDP - composition, by end use | household consumption: NA% government consumption: NA% investment in fixed capital: NA% investment in inventories: NA% exports of goods and services: 5.9% imports of goods and services: -11.1% (2014 est.) |
| GDP - composition, by sector of origin | agriculture: 25.1% industry: 40.9% services: 33.9% (2016 est.) |
| Agriculture - products | rice, corn, potatoes, soybeans, pulses, beef, pork, eggs |
| Industries | military products; machine building, electric power, chemicals; mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing; tourism |
| Industrial production growth rate | 0.5% (2016 est.) |
| Labor force | 14 million note: estimates vary widely (2014 est.) |
| Labor force - by occupation | agriculture: 37% industry and services: 63% (2008 est.) |
| Unemployment rate | 25.6% (2013 est.) 25.5% (2012 est.) |
| Population below poverty line | NA% |
| Household income or consumption by percentage share | lowest 10%: NA% highest 10%: NA% |
| Budget | revenues: $3.2 billion expenditures: $3.3 billion (2007 est.) |
| Taxes and other revenues | 11.4% of GDP note: excludes earnings from state-operated enterprises (2007 est.) |
| Budget surplus (+) or deficit (-) | -0.4% of GDP (2007 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | NA% |
| Exports | $4.152 billion (2015 est.) $4.152 billion (2015 est.) |
| Exports - commodities | minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products |
| Exports - partners | China 75.8% (2015) |
| Imports | $4.819 billion (2015 est.) $4.819 billion (2015 est.) |
| Imports - commodities | petroleum, coking coal, machinery and equipment, textiles, grain |
| Imports - partners | China 76.4%, Republic of the Congo 5.5% (2015) |
| Debt - external | $5 billion (2013 est.) |
| Exchange rates | North Korean won (KPW) per US dollar (average market rate) 135 (2015 est.) 129.9 (2014 est.) 98.5 (2013 est.) 155.5 (2012 est.) |