The DPRK’s gross domestic product (GDP) stood at $30.7 billion last year, increasing by 3.7 percent compared with 2016, according to Ri Gi Song, a North Korean professor at Pyongyang’s Institute of Economics at the Academy of Social Sciences.
Ri gave the GDP figure during an interview with Japan’s Kyodo News Agency, which has a bureau in the North Korean capital.
The DPRK rarely publishes data on its economy, though during the interview Ri also gave little indication as to how the number had been generated, and did not provide other data for other economic factors that comprise GDP.
North Korea’s $30.7 billion figure and growth rate also contrast with the South’s Bank of Korea (BOK) estimates, which showed a 3.5 percent decrease in the DPRK’s GDP in 2017.
According to the BOK figures, several key North Korean economic sectors shrank last year, resulting in the lowest overall growth rate since 1997.
“The growth rates of mining & manufacturing and electricity, gas & water supply, which were positive in 2016, turned negative,” the BOK said in their 2017 update.
The BOK estimated that UN sanctions on the DPRK likely contributed to the falling productivity, hitting sectors like mining the hardest.
“Mining production decreased by 11.0% in 2017 (+8.4% in 2016), owing to a sharp decline of coal mining,” the BOK report says.
“Manufacturing production contracted by 6.9% (+4.8% in 2016) mainly due to a decrease in heavy & chemical industry production.”
Agriculture, construction and the electricity productions sectors also all ticked downwards, according to the South Korean bank’s estimates.
Further contrasting with Ri’s figures, North Korea’s trade deficit with its trading partners also sharply increased last year, moving from around $230 million in 2016, to over $1.5 billion the following year.
The numbers – provided by the ITC Trade Map – show an extra $1.3 billion flowing out of the North Korean economy in 2017, a number which comprises around four percent of Ri’s given figure for North Korean GDP.
While a large trade deficit is not necessarily a negative indicator of an economy’s health, such outflows also typically cause a country’s GDP to decrease.
The BOK numbers also noted the shutdown of the Kaesong Industrial Complex as a possible contributor to a lower GDP.
“Bilateral trade between North and South Korea decreased by 99.7 percent year on year to record 0.9 million dollars in 2017,” the BOK report said.
“Since the shutdown of the Kaesong Industrial Complex in 2016, there has been almost no trade between North and South Korea.”
But during the interview, Ri dismissed Bank fo Korea’s numbers saying that they were only estimates, telling Kyodo that the country’s population had grown and that North Korea had mitigated the effect of sanctions “various technologies” that improved efficiency.
Ri noted that North Korea now made more efficient use of crude oil, though according to its trade numbers, China has not exported any crude oil to North Korea since 2013, making it difficult to gauge trade and generate comparisons.
But the Bank of Korea is also a little vague on how it reaches its estimates, saying it uses “the basic data on production quantities supplied by relevant institutions.”
“The Bank of Korean numbers, which rest largely on physical output measures in the state-owned enterprise sector coupled with some assumptions about prices,” Stephan Haggard, director of the Korea-Pacific Program at IR/PS, told NK News.
“Given that the North has never attempted this exercise, it is extremely doubtful that these numbers mean anything.”
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Featured Image: Pyongyang Dusk by m•o•m•o on 2012-03-10 01:06:18