North Korea economy shrinks 3 percent after sanctions

July 27 (UPI) -- North Korea registered its lowest annual economic growth rate in 20 years as channels for coal and textile exports were blocked following sanctions, according to South Korea's central bank.

The Bank of Korea stated in a recent report on North Korea the economy is estimated to have shrunk 3.5 percent, Hankyung Business reported Friday.

The assessment from Seoul comes at a time when a group of South Korean business executives are hoping to resume inter-Korea economic projects at Kaesong, the shuttered factory park in the North.

Economic decline in 2017 can be attributed to a combination of factors, including a drought and the toughest sanctions to be imposed on the country, following a series of weapons tests last year.

"As weather conditions deteriorated [in 2017], and grain production decreased, the economy was hit hard by the impact of unprecedented sanctions," a Bank of Korea official told the local news service.

North Korea's worst year was 1997, during a famine that may have left millions dead.

According to South Korean estimates, that year the economy shrunk 6.5 percent.

North Korea eventually recovered, registering near-consistent positive growth rates after 2010.

Only in 2015 did North Korea shrink 1.1 percent. By 2016, the economy grew 3.9 percent.

The country's highest rate of growth is believed to have taken place in 1999, when the economy expanded by 6.1 percent, according to the Bank of Korea.

North Korea's economy in gross national income terms is estimated to be about $32.7 billion. The gross national income per capita is about $1,300, or about 4.4 percent of the South's $30,100.

South Korean business executives who have said they incurred losses following the abrupt closure of the Kaesong Industrial Complex in February 2016, are hoping they can resume production at the site.

Newsis reported Friday Seoul's unification ministry has approved their request to visit Kaesong. A total of 153 people have received permission to travel.

About a dozen of the executives also met with Mark Lambert in Seoul on Friday, the U.S. State Department's Korea desk director, Yonhap reported.

Lambert did not view the reopening of Kaesong or resumption of cross-border tourism in a favorable light, sources told Yonhap.