North Korea's economy stabilizing after first wave of COVID-19, research says

June 5 (UPI) -- The coronavirus pandemic has had a limited impact on the North Korean economy, but could affect its state-owned enterprises in the long term, according to Hana Financial Management Research Institute in South Korea.

A report from the institute under South Korea's Hana Bank says North Korea's economy was expected to suffer serious setbacks at an earlier stage of the COVID-19 pandemic. Pyongyang was already under heavy sanctions due to nuclear weapons development.

Economists and analysts now say there is evidence the North Korean economic situation appears to have stabilized, South Korean news service NK Economy reported Friday.

Following the near-complete shutdown of its border with China, North Korea's trade with China, 90 percent of all trade, dropped sharply, according to Hana Financial.

The South Korean institute estimates North Korea's China imports fell 53 percent in the first quarter of this year, while exports to China fell 71 percent.

In April, China-North Korea trade dropped 90 percent both ways, the report says.

A prolonged pandemic is also expected to impact North Korea's state-owned enterprises in major sectors, including metals, chemical and electric power generation.

North Korea's exchange rate and prices may have stabilized.

Rice, a key staple, cost about 4,500 North Korean won per kilogram in late January, according to Hana Financial. Prices rose to 5,500 won, before returning to pre-crisis levels in late May, according to the report.

North Korea's exchange has also recovered. The rate stood at about 8,400 won to the dollar from January to April, plummeting to 7,300 won in late April. In May, the rate returned to a level of about 8,000 won or greater.

North Korea has ordered students to return to school this week, Daily NK reported Friday. Anyone suspected of a COVID-19 infection must quarantine for a month, a source in North Korea said, according to the report.