Go to Contents Go to Navigation

(LEAD) N. Korea's economy shrank 1.1 pct in 2015: BOK

All News 14:37 July 22, 2016

(ATTN: UPDATES with comments on data accuracy in last 8 paras)

SEOUL, July 22 (Yonhap) -- North Korea's economy is estimated to have contracted 1.1 percent last year amid negative growth in most industries, South Korea's central bank announced Friday.

The Bank of Korea (BOK) has issued an annual report on the estimated gross domestic product (GDP) of one of the world's most secretive nations.

It said the communist country's GDP shrank 1.1 percent in 2015 from a year earlier, the first negative growth since 2010.

The bank cited a drop in crop and mining output by 0.8 percent and 2.6 percent, respectively.

The manufacturing sector suffered a 3.4 percent decline. The electricity, gas and tap water business also tumbled 12.7 percent due to a fall in hydroelectric power production attributable to a drought, according to the BOK.

But the construction field posted a 4.8 percent rise, and the service sector grew 0.8 percent.

The North's mining and manufacturing industries accounted for 32.7 percent of its GDP, down 1.7 percentage points from 2014.

The BOK put the North's gross national income (GNI) at 34.5 trillion won ($30.3 billion), 45 times less than that of South Korea. The North has around 25 million residents, half of the South's population.

The data also showed that the North's trade volume totaled $6.25 billion, down 17.9 percent on-year.

Exports slipped 14.8 percent to $2.7 billion, and imports shed 20 percent to $3.56 billion.

The North is under heavy U.N.-led economic sanctions for its nuclear and missile activities.

Since no accurate economic data from North Korea are available, the BOK said the statistics are based on estimates using methodologies applied to gauge South Korea's own economy. Thus, it's not desirable to directly compare the data with those of other foreign nations, added the bank.

For the trade figures, it analyzed some rudimentary information, like North Korea-China trade data, from the National Intelligence Service, the Korea Trade-investment Promotion Agency and other relevant agencies.

It's hard to precisely measure the North's economic transactions, especially amid the spread of smuggling near the border area and black markets, known as Jangmadang, across the tightly controlled country, North Korea watchers said.

"Don't trust any datum about North Korea that comes with decimal points attached," Marcus Noland, a North Korea expert at the Peterson Institute for International Economics, told the Foreign Policy magazine in 2013.

Some pundits here also voiced skepticism about the accuracy of the BOK's report.

"It seems like that it does not faithfully reflect progress in North Korea's market economy," said Lim Eul-chul, a professor at the Institute for Far East Studies of Kyungnam University.

North Korea's economy is believed to have expanded last year, he added, citing the continued growth of Jangmadang and the construction sector's added value.

BOK officials refuted the claim.

"The trend of spreading markets in North Korea has been reflected in the statistics," said Kim Hwa-yong, a BOK official. "The data are considered not to be off the mark, in general, despite difficulties in estimating such statistics on North Korea with insufficient basic materials."


Send Feedback
How can we improve?
Thanks for your feedback!