Economy - overview More than 90% of this command economy is socialized; agricultural land is collectivized; and state-owned industry produces 95% of manufactured goods. State control of economic affairs is unusually tight even for a communist country because of the small size and homogeneity of the society and the strict rule of KIM Il-song in the past and now his son, KIM Chong-il. Economic growth during the period 1984-88 averaged 2%-3%, but output declined by an average of 4%-5% or more annually during 1989-97 because of systemic problems and disruptions in economic and technological links with the former USSR and China. The leadership has insisted on maintaining its high level of military outlays from a shrinking economic pie. Moreover, a serious drawdown in inventories and critical shortages in the energy sector have led to increasing interruptions in industrial production. Abundant mineral resources and hydropower have formed the basis of industrial development since World War II. Manufacturing is centered on heavy industry, including military industry, with light industry lagging far behind. Despite the use of improved seed varieties, expansion of irrigation, and the heavy use of fertilizers, North Korea is not yet self-sufficient in food production. Indeed, a shortage of arable lands, several years of poor harvests, systemic inefficiencies, a cumbersome distribution system, and extensive floods in 1995-96 followed by a severe drought in 1997 have resulted in increasingly serious food shortages. Substantial grain shipments from Japan and South Korea are offsetting a portion of the losses. North Korea remains far behind South Korea in economic development and living standards.

GDP purchasing power parity - $21.8 billion (1997 est.)

GDP - real growth rate -3.7% (1997 est.)

GDP - per capita purchasing power parity - $900 (1997 est.)

GDP - composition by sector
agriculture: 25%
industry: 60%
services: 15% (1995 est.)

Inflation rate - consumer price index NA%

Labor force
total: 9.615 million
by occupation: agricultural 36%, nonagricultural 64%

Unemployment rate NA%

Budget
revenues: $19.3 billion
expenditures: $19.3 billion, including capital expenditures of $NA (1992 est.)

Industries military products; machine building, electric power, chemicals; mining (coal, iron ore, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing

Industrial production growth rate -7% to -9% (1992 est.)

Electricity - capacity 9.5 million kW (1995)

Electricity - production 35.2 billion kWh (1995)

Electricity - consumption per capita 1,499 kWh (1995)

Agriculture - products rice, corn, potatoes, soybeans, pulses; cattle, pigs, pork, eggs

Exports
total value: $912 million (f.o.b., 1996 est.)
commodities: minerals, metallurgical products, agricultural and fishery products, manufactures (including armaments)
partners: China, Japan, South Korea, Germany, Hong Kong, Russia

Imports
total value: $1.95 billion (c.i.f., 1996 est.)
commodities: petroleum, grain, coking coal, machinery and equipment, consumer goods
partners: China, Japan, Hong Kong, Germany, Russia, Singapore

Debt - external $12 billion (1996 est.)

Economic aid
recipient: an estimated $200 million to $300 million in aid from US, South Korea, Japan, and EU in 1997

Currency 1 North Korean won (Wn) = 100 chon

Exchange rates North Korean won (Wn) per US$1 - 2.15 (May 1994), 2.13 (May 1992), 2.14 (September 1991), 2.1 (January 1990), 2.3 (December 1989)

Fiscal year calendar year

NOTE: The information regarding Korea, North on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Korea, North Economy 1998 information contained here. All suggestions for corrections of any errors about Korea, North Economy 1998 should be addressed to the CIA.