North Korea’s 2015 GDP Sees Sharpest Decline in Eight Years Amid Export Challenges: South Korea Reports

SEOUL (Reuters) – According to estimates from the Bank of Korea, North Korea’s economy shrank at its fastest rate in eight years in 2015, primarily due to low global commodity prices impacting exports, which are crucial for the country’s struggling economy.

The country’s gross domestic product (GDP) decreased by 1.1 percent last year, marking the first decline since 2010, compared to a 1.0 percent increase in 2014. This downturn was the steepest since a 1.2 percent drop experienced in 2007.

North Korea does not release its own economic data, which makes external assessments necessary.

All sectors experienced a decline, except construction and services, which places additional pressure on North Korean leader Kim Jong Un amid international sanctions arising from various provocations, including a nuclear test in January.

A Bank of Korea official noted that the contraction in GDP was mainly due to trade issues, with falling global commodity prices and decreased demand from China. North Korea’s primary exports, coal and iron ore, likely saw significant declines during the year.

China remains North Korea’s largest trading partner. Data from the Bank of Korea indicated that exports dropped by 14.8 percent in annual terms, with mineral product shipments falling by 14.7 percent—much worse than the 1.7 percent decline observed in 2014. Imports fell even more sharply, decreasing by 20.0 percent, in contrast to a 7.8 percent rise in 2014.

The central bank official mentioned that the trade situation is expected to deteriorate further this year, as increasing international sanctions following North Korea’s ongoing missile tests and nuclear threats are likely to limit its ability to conduct trade with other nations.

On a more positive note, construction saw a 4.8 percent increase in 2015, up from a 1.4 percent gain in 2014. Moreover, a 0.8 percent rise in services suggests a gradual shift toward a more market-oriented economy, with a growing black market and expansion in financial services contributing to this trend.

The Bank of Korea has been publishing GDP data for North Korea annually since 1991, relying on information obtained from various sources, including the Ministry of Unification.