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North Korea's economy contracts most in 23 years, bank figures show

The coronavirus pandemic, climate change and economic sanctions had an impact on North Korean economic growth in 2020, Seoul’s Bank of Korea said in a report Friday. File Photo by Stephen Shaver/UPI
The coronavirus pandemic, climate change and economic sanctions had an impact on North Korean economic growth in 2020, Seoul’s Bank of Korea said in a report Friday. File Photo by Stephen Shaver/UPI | License Photo

July 30 (UPI) -- North Korea's economy shrank 4.5% in 2020, registering the greatest contraction in 23 years, according to South Korea's central bank.

Bank of Korea said Friday that the negative growth in North Korea's gross domestic product could be attributed to Pyongyang's decision to close its borders last year amid the global coronavirus pandemic and international sanctions, Newsis reported.

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North Korea is estimated to have witnessed the greatest decrease in economic activity and output in 1997, during the Great Famine. The South's central bank has said the North's economy that year shrank 6.5% as hundreds of thousands, and possibly millions of people, died amid a food shortage.

The regime's economy was exhibiting signs of negative growth before the pandemic, the Bank of Korea said.

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North Korea's economic growth rate was -0.5% in 2010, and then grew about 1% annually for four years starting in 2011.

The economy shrank by 1.1% in 2015m but posted a 3.9% gain in 2016. It then declined for two consecutive years before recording a positive 0.4% growth rate in 2019.

The Bank of Korea's numbers generally correspond to estimates from Seoul's National Statistical Office, which compiles its own numbers. North Korea's economy registered negative growth in 2017 and 2018 before recovering in 2019, the statistical office said last year.

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Choi Jung-tae, head of the National Income Statistics Team of the Bank's Economic Statistics Desk, said the North's economy contracted in 2017 and 2018 because of "strong international sanctions," Kyunghyang Shinmun reported Friday.

Choi also said that COVID-19, flooding and typhoons have had an impact on North Korean economic growth.

North Korea's gross national income per capita in 2020 was $1,197.50, or 3.7% of South Korea's, the Bank said.

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The Bank of Korea has estimated North Korea's GDP growth since 1991 and uses South Korean relative prices to estimate real GDP, according to reports.

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