"Effect of North Korea-Russia Economic Cooperation" North Korean Economy Sees 3% Growth for Third Consecutive Year

Bank of Korea Releases "2025 North Korea Economic Growth Rate Estimates"
3.5% Growth Recorded Last Year... Three Consecutive Years of 3% Growth
Impact of North Korea-Russia Cooperation, Expanded Trade with China, and National Policy Projects
Per Capita National Income at 1.87 Million Won... About 1/28th of South Korea’s Level

Last year, North Korea's economy grew by 3.5%. The country has recorded annual growth in the 3% range for three consecutive years, driven by expanded economic cooperation with Russia, increased trade with China, and the implementation of various state policy projects. Last year, North Korea's per capita gross national income stood at 1,873,000 won, which is about 1/28th the level of South Korea (52,570,000 won).

Migratory birds are flying north and south across the Western Front Demilitarized Zone (DMZ) as seen from the border area in Paju, Gyeonggi Province. Photo by Yonhap News Agency

According to the "2025 North Korea Economic Growth Rate Estimates" released by the Bank of Korea on July 31, North Korea’s real gross domestic product (GDP) grew by 3.5% compared to the previous year. Manufacturing and construction continued their upward trajectory, while agriculture, forestry, and fisheries rebounded, resulting in three consecutive years of growth in the 3% range. However, the growth rate fell short of the previous year's 3.7% due to a slowdown in sectors such as mining.

As a result, the scale of North Korea's real GDP last year reached 38.264 trillion won, surpassing the level recorded in 2017, when United Nations (UN) sanctions against the country were intensified.

Seo Jungsuk, head of the National Income Statistics Team 2 at the Bank of Korea, stated, "Expanded cooperation between North Korea and Russia significantly impacted North Korean economic growth." He added, "From a production perspective, sectors ranging from manufacturing to services appeared to have contributed positively to the North Korean economy." In manufacturing, increased demand for arms exports led to higher production volumes in both upstream and downstream industries. The services sector also saw marked growth, driven by a rise in Russian tourists and expansion of related transportation infrastructure, boosting areas such as accommodation, food services, and transit. From an income perspective, the dispatch and deployment of North Korean workers overseas was assessed to have brought about a sharp increase in foreign currency earnings.

Manufacturing (6.6%) maintained solid growth from the previous year (7.0%), with both light and heavy chemical industries expanding. Light industry grew by 3.8%, mainly in food and beverages—the highest rate since 2022 (5.0%). The government’s "20 x 10 Regional Development Policy," which aimed to promote national projects such as the construction of 20 new local factories for light industry and essential consumer goods production each year over a decade, was described as a key domestic driver of this strong performance. Seo explained, "This policy to build 20 factories annually for light industry and essential consumer goods over 10 years has yielded noticeable results for light industry growth." Heavy and chemical industries also recorded a 7.8% increase, driven by advances in assembly metal, machinery, and primary metal products.

Construction (6.3%) was supported by both internal and external factors. The number of non-residential buildings such as state-run shops, service centers (comprehensive shopping malls), and hospitals increased to accommodate the distribution of light industry products and public facility expansion. The expansion of transportation infrastructure, including roads and railways for growing numbers of Russian tourists, further drove up civil engineering and construction activity. Agriculture, forestry, and fisheries (3.6%) grew due to favorable climate conditions, especially in the cultivation sector.

The services sector rose by 1.8%, mainly in transportation and communications, retail and wholesale, and accommodation and food services. This was the highest growth rate for the services sector since 1994 (2.3%). Seo explained, "The increase in production of consumer goods positively influenced the production of retail and wholesale service businesses."

However, mining (1.6%) growth slowed as coal mining declined.

Last year, by industry share (as a percentage of nominal GDP), manufacturing and mining accounted for 30.1%, services 29.6%, and agriculture, forestry, and fisheries 21.2%.

North Korea’s nominal gross national income (GNI) reached 48.5 trillion won, rising 9.4% from the previous year. This is 1/56th (1.8%) the size of that of South Korea (2,717.1 trillion won). Per capita GNI was 1,873,000 won—one twenty-eighth (3.6%) the South Korean level (52,570,000 won)—marking a 9.0% year-on-year increase.

In 2025, North Korea's total external trade volume reached USD 3.13 billion, up 16.0% from the previous year (USD 2.70 billion). Exports grew by 30.0% to USD 470 million, mainly in processed feathers and wigs, as well as toys. Imports rose by 13.9% to USD 2.66 billion, primarily in clothing and edible oils of animal and plant origin.

Meanwhile, since 2023, there has been no record of any imports or exports between North and South Korea.

This content was produced with the assistance of AI translation services.