N. Korean economy suffers 4.1 percent setback in 2018 due to sanctions

Lim Chang-won Reporter() | Posted : July 26, 2019, 15:00 | Updated : July 26, 2019, 15:00

[KCNA / Yonhap]

SEOUL -- North Korea's economy suffered a 4.1 percent setback in 2018 after a contraction of 3.5 percent a year earlier due to a combination of strengthened international sanctions and unfavorable weather, South Korea's central bank data showed. It was the worst performance since 1997 when the North's economy shrank 6.5 percent.

The Bank of Korea (BOK) gave no explanation in reporting the second consecutive year of contraction in the North's gross domestic product (GDP) on Friday. The North's estimated trade volume stood at $2.84 billion in 2018, down 48.8 percent from a year earlier. Exports plunged 86.3 percent to $240 million and imports were down 31.2 percent to $2.6 billion.

BOK data proved that the impoverished North has been in an economically dire state. The international community has put strict sanctions against Pyongyang. North Korea wants more than U.S. cooperation and rewards such as sanctions relief and a security guarantee, while Washington demands Pyongyang takes practical steps on denuclearization. Denuclearization talks have been in a stalemate following a failed summit between U.S. and North Korean leaders in Vietnam in February.

In 2018, the North's manufacturing sector shrank 9.1 percent and mining output was down 17.8 percent as U.N. resolutions banned shipments of textile and coal products,.

BOK data showed the North's economy has expanded 1.2 percent on average since the young leader took power in late 2011 following the sudden death of his father who achieved a GDP expansion of 0.2 percent on average during his 17-year rule.

In 2016, the North's GDP grew 3.9 percent after a contraction of 1.1 percent in 2015, but GDP contracted 3.5 percent in 2017 after Beijing, which has been Pyongyang's economic lifeline, joined international sanctions.
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