Korea, North Economy Profile 2008

Economy - overview

North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Industrial and power output have declined in parallel from pre-1990 levels. Due in part to severe summer flooding followed by dry weather conditions in the fall of 2006, the nation suffered its 13th year of food shortages because of on-going systemic problems including a lack of arable land, collective farming practices, and persistent shortages of tractors and fuel. During the summer of 2007, severe flooding again occurred. Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Large-scale military spending draws off resources needed for investment and civilian consumption. Since 2002, the government has formalized an arrangement whereby private "farmers' markets" were allowed to begin selling a wider range of goods. It also permitted some private farming on an experimental basis in an effort to boost agricultural output. In October 2005, the government tried to reverse some of these policies by forbidding private sales of grains and reinstituting a centralized food rationing system. By December 2005, the government terminated most international humanitarian assistance operations in North Korea (calling instead for developmental assistance only) and restricted the activities of remaining international and non-governmental aid organizations such as the World Food Program. External food aid now comes primarily from China and South Korea in the form of grants and long-term concessional loans. During the October 2007 summit, South Korea also agreed to develop some of North Korea's infrastructure and natural resources and light industry. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations.

GDP (purchasing power parity)

$40 billion
note: North Korea does not publish any reliable National Income Accounts data; the datum shown here is derived from purchasing power parity (PPP) GDP estimates for North Korea that were made by Angus MADDISON in a study conducted for the OECD; his figure for 1999 was extrapolated to 2007 using estimated real growth rates for North Korea's GDP and an inflation factor based on the US GDP deflator; the result was rounded to the nearest $10 billion (2007 est.)

GDP (official exchange rate)

$2.22 billion (2006 est.)

GDP - real growth rate

-1.1% (2006 est.)

GDP - per capita (PPP)

$1,900 (2007 est.)

GDP - composition by sector

agriculture: 23.3%
industry: 43.1%
services: 33.6% (2002 est.)

Population below poverty line

NA%

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

NA%

Labor force

20 million
note: estimates vary widely (2004 est.)

Labor force - by occupation

agriculture: 37%
industry and services: 63% (2004 est.)

Unemployment rate

NA%

Budget

revenues: $2.88 billion $NA
expenditures: $2.98 billion $NA

Industries

military products; machine building, electric power, chemicals; mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing; tourism

Industrial production growth rate

NA%

Electricity - production

22.5 billion kWh (2006 est.)

Electricity - consumption

18.57 billion kWh (2005)

Electricity - exports

0 kWh (2007)

Electricity - imports

0 kWh (2007)

Oil - production

141 bbl/day (2005 est.)

Oil - consumption

10,520 bbl/day (2006)

Oil - imports

10,520 bbl/day (2006 est.)

Oil - exports

0 bbl/day (2006)

Oil - proved reserves

NA bbl

Natural gas - production

0 cu m (2007 est.)

Natural gas - consumption

0 cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

0 cu m (2007)

Natural gas - proved reserves

0 cu m (1 January 2007)

Agriculture - products

rice, corn, potatoes, soybeans, pulses; cattle, pigs, pork, eggs

Exports

$1.466 billion f.o.b. (2006)

Exports - commodities

minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products

Exports - partners

South Korea 32%, China 29%, Thailand 9% (2006)

Imports

$2.879 billion c.i.f. (2006)

Imports - commodities

petroleum, coking coal, machinery and equipment, textiles, grain

Imports - partners

China 27%, South Korea 16%, Thailand 9%, Russia 7% (2006)

Debt - external

$12.5 billion (2001 est.)

Economic aid - recipient

$372 million
note: approximately 65,000 metric tons in food aid through the World Food Program appeals in 2007, plus additional aid from bilateral donors and non-governmental organizations (2007 est.)

Currency (code)

North Korean won (KPW)

Exchange rates

official: North Korean won per US dollar - 140 (2007), 141 (2006), 170 (December 2004), market: North Korean won per US dollar - 2,500-3,000 (December 2006)

Fiscal year

calendar year