The Bank of (South) Korea on Friday unveiled the North Korean economic growth rate, noting that its gross domestic product increased 1 percent in 2014 from the previous year.
The North’s mining industry grew by 1.6 percent, and manufacturing showed 0.8 percent of growth due mainly to increasing production of textiles and shoes. The service industry, including restaurants, accommodation, transportation and communication showed 1.3 percent growth.
The overall structure of the industry has changed slightly. Agriculture and fisheries accounted for 21.8 percent in 2014 and 22.4 percent in 2013. Service has increased to 31.3 percent from 30.0 percent in 2013 and 29.4 percent in 2012.
“The increase in the service industry is a coherent trend according to the marketization of North Korea. However, stagnant agriculture and fisheries is short-term change, partly due to drought from last year, which is too early to define it as a transition in industry,” Lee Seok-ki, senior researcher of Korea Institute for Industrial Economics and Trade told NK News.
Weather affected electric power supply as well. Overall power supply has decreased by 2.8 percent, mainly due to the decrease in hydro power.
“Last year, hydro power plants couldn’t operate well because of frozen water, and the drought made it difficult to operate them in spring,” Lee said.
Building construction led the growth in the construction industry, even though the construction on roads and power plants has been stagnant.
“This means construction by individuals and institutions has increased, compared to construction by government,” Jung Eun-lee, professor at Kyungsang University told NK News.
Google Earth images from Pyongyang taken by NK News supports the rapidly growing construction sector in North Korea. Two buildings were created within eight months, and another building next to it was completed after another eight months.
Jung said that this speedy manner is possible thanks to investment from the donju (wealthy class).
“It used to take the state five to 10 years to complete one building,” Jung said. “This accelerated construction indicates that the donju class can get construction material and labor force quickly.”
Following this change, Jung said the quality of apartments has improved.
“More construction materials are imported from China, which is better than North Korean ones, and these days apartments equipped with refurbished interior design are sold.”
The Bank of Korea has published North Korea’s economic growth rate since 1991, based on materials from specialized institutions and experts’ investigation. It commented that every index was calculated and estimated based on South Korean economy’s standard and classification, aiming at a comparison between two Koreas’ economies.
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Featured Image: Chongjin Steel works North Korea by Ray Cunningham on 2013-06-21 13:48:40