World Economy

North Korea GDP Contracts

North Korea GDP ContractsNorth Korea GDP Contracts

North Korea’s economy contracted 3.5% on-year in 2017 in the aftermath of tougher international sanctions and drought, logging the worst showing in two decades, South Korea’s central bank said Friday.

In 2017, the communist country’s estimated gross domestic product marked a sharp decline from 3.9% growth in the previous year to report the worst performance since 1997 when its economy retreated 6.5%, according to the report by the Bank of Korea. Yonhap reported.

“The negative growth is attributable to a drop in its mining output and a retreat in its heavy and chemical industries, as the United Nations imposed tougher sanctions over its nuclear and missile activities,” said a BoK official, adding that unfavorable weather conditions hit the already fragile economy.

The sanctions call for a ban on the country’s exports of coal and other mineral resources to cut off its access to hard currency.

Last year, the mining industry in North Korea tumbled 11% due to a drop in coal production, a sharp turnaround from a 8.4% growth in 2016. Its agricultural and fisheries output fell 1.3% on-year, according to the data.

The manufacturing sector also suffered a 6.9% decline, compared to a 4.8% increase in 2016. Though light industry inched up 0.1%, the heavy and chemical sectors sank 10.4%, the bank said.

The electricity, gas and tap water business shed 2.9% in 2017 due to a fall in hydroelectric power production, and the construction field posted a 4.4% decrease. But the service sector went up 0.5%.

BoK put the North’s gross national income in 2017 at 36.6 trillion won ($32.2 billion), which is 2.1% of that of South Korea. Its per-capita GNI stood at 1.46 million won, which is 23-times less than the South’s.

The country’s trade volume stood at $5.55 billion last year, down 15% from a year earlier, the BoK said.

Exports tumbled 37.2% to $1.77 billion, while imports inched up 1.8% to $3.78 billion.

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