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N. Korea's economy shrinks 3.5 pct in 2017: BOK

All Headlines 12:12 July 20, 2018

SEOUL, July 20 (Yonhap) -- North Korea's economy contracted 3.5 percent on-year in 2017 in the aftermath of tougher international sanctions and drought, logging the worst showing in two decades, South Korea's central bank said Friday.

In 2017, the communist country's estimated gross domestic product (GDP) marked a sharp decline from 3.9 percent growth in the previous year to report the worst performance since 1997 when its economy retreated 6.5 percent, according to the report by the Bank of Korea (BOK).

Last year, the South Korean economy grew 3.1 percent from a year earlier.

"The negative growth is attributable to a drop in its mining output and a retreat in its heavy and chemical industries, as the United Nations imposed tougher sanctions over its nuclear and missile activities," said a BOK official, adding that unfavorable weather conditions hit the already fragile economy.

The sanctions call for a ban on the country's exports of coal and other mineral resources to cut off its access to hard currency.

Last year, the mining industry in North Korea tumbled 11 percent due to a drop in coal production, a sharp turnaround from a 8.4 percent growth in 2016. Its agricultural and fisheries output fell 1.3 percent on-year, according to the data.

The manufacturing sector also suffered a 6.9 percent decline, compared to a 4.8 percent increase in 2016. Though light industry inched up 0.1 percent, the heavy and chemical sectors sank 10.4 percent, the bank said.

The electricity, gas and tap water business shed 2.9 percent in 2017 due to a fall in hydroelectric power production, and the construction field posted a 4.4 percent decrease. But the service sector went up 0.5 percent.

N. Korea's economy shrinks 3.5 pct in 2017: BOK - 1

The BOK put the North's gross national income (GNI) in 2017 at 36.6 trillion won ($32.2 billion), which is 2.1 percent of that of South Korea. Its per-capita GNI stood at 1.46 million won, which is 23-times less than the South's.

The communist country's trade volume stood at $5.55 billion last year, down 15 percent from a year earlier, the BOK said.

Exports tumbled 37.2 percent to $1.77 billion, while imports inched up 1.8 percent to $3.78 billion.

The volume of inter-Korean trade collapsed 99.7 percent on-year to log $900,000 in 2017, after the Seoul government shut down the joint industrial complex of Kaesong the previous year.

Such a downturn would continue well into this year, officials said, despite a recent thaw in relations between the North and the outside world.

"The U.N. imposed fresh sanctions against the North in August and December, and those will make a serious dent in the North Korean economy this year," another BOK official said, noting that the North's transactions with China have already tumbled "significantly" in the first half of this year.


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