North Korea's Economy Contracts Amidst Sanctions and COVID-19
GDP Growth Plummets, Per Capita Income Stagnant
North Korea's economy has contracted by 0.20% in the fourth quarter of 2022 compared to the same period in 2021, marking a significant decline in the country's GDP. This contraction follows years of economic stagnation, with North Korea's GDP growth rate averaging just -0.67% from 1990 to 2022. The country's GDP per capita remains below $2,000, far behind that of its neighbor, South Korea.
The dismal economic performance can be attributed to a combination of factors, including international sanctions imposed on North Korea due to its nuclear and missile programs and the impact of the COVID-19 pandemic. The sanctions have severely restricted North Korea's trade and access to foreign investment, while the pandemic has disrupted supply chains and hindered economic activity.
Government Services Contributes Significantly to GDP
Despite the overall decline in GDP, the government services sector in North Korea has experienced some growth. In 2022, the contribution of government services to North Korea's real GDP was estimated at approximately 8.3 trillion South Korean won.
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