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Construction is ongoing at a housing complex for scientists in Pyongyang

On July 21, the Bank of Korea announced that North Korea’s real gross domestic product (GDP) in 2016 increased by 3.9%, and that it had a gross national income (GNI) per capita of 1,461,000 South Korean won (about US$1,300).

The GDP growth was the highest rate since 1999 (6.1%). “A major factor in the North Korean economy was the base effect resulting from the negative growth (-1.1%) caused by the drought in 2015. The low-growth paradigm remains in place, with an average yearly rate of growth of 1.3% in 2015 and 2016,” the Bank of Korea said. North Korea’s economic growth rate is estimated using South Korea’s system of national accounts (SNA) method of gauging national income, based on documents drawn up by professional organizations in the North Korean economy.

Aug. 24

By industry, growth was led by a major rally in mining (-2.6%→8.4%), with production increasing in coal and zinc mines; manufacturing (-3.4%→4.8%), with heavy industry, including primary metals and chemical products, enjoying a boom; and electricity, gas and water (-12.7%→22.3%), with more output from hydroelectricity and coal. In North Korea, the mining and industrial sectors account for 33.2% of nominal GDP, which is higher than the service sector (31.1%). The growth rate declined in the construction sector (4.8%→1.2%) and the service sector (0.8%→0.6%).

North Korea’s nominal GNI last year was estimated to be 36.4 trillion won, or 1/45 (2.2%) of South Korea (1,639.1 trillion won). GNI per capita in the North was 1,461,000 won, about 1/22 (4.6%) of South Korea (31,984,000 won). Last year, North Korea had a population of 24,900,000, which was 48.6% of South Korea (51,250,000).

North Korea’s foreign trade last year (excluding inter-Korean trade) amounted to US$6.55 billion, which was up 4.7% from the previous year. Exports (US$2.82 billion) and imports (US$3.73 billion) increased by 4.6% and 4.8%, respectively. Inter-Korean trade shrank 87.7% to US$330 million, because of former President Park Geun-hye’s (2013-16) decision to close the Kaesong Industrial Complex last year. Since April 2016, there has been no movement of goods between North and South Korea.

By Han Gwang-deok, finance correspondent

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