North Korea economy contracts at sharpest rate in 20 years in 2017

According to the Bank of Korea’s (BOK), South Korea’s central bank, estimates published on Friday, North Korea’s economy contracted at the sharpest rate in two decades in 2017, Reuters reports.

Key Highlights:

Gross domestic product (GDP) in North Korea last year contracted 3.5 percent from the previous year, marking the biggest contraction since a 6.5 percent drop in 1997 when the isolated nation was going through a devastating famine.   

Industrial production, which accounts for about a third of the nation’s total output, dropped by 8.5 percent and also marked the steepest decline since 1997 as factory production collapsed on restrictions of flows of oil and other energy resources into the country.

The output from agriculture, construction industries also fell by 1.3 percent and 4.4 percent, respectively.

Shin Seung-cheol, Head of the BOK’s National Accounts Coordination Team noted: “The sanctions were stronger in 2017 than they were in 2016. External trade volume fell significantly with the exports ban on coal, steel, fisheries and textile products. It’s difficult to put exact numbers on those but it (export bans) crashed industrial production.”