North Korea Achieves Highest Economic Growth Since 2016 Amid Deepening Ties with Russia

Gerik

Summary:

North Korea’s economy expanded by 3.7% in 2024, its fastest pace in eight years, fueled by increased cooperation with Russia and a surge in industrial production, particularly in the heavy chemical and mining sectors....

North Korea’s 2024 Growth Surges on Russian Trade and Industrial Expansion

According to the Bank of Korea (BOK), North Korea’s economy posted a 3.7% growth rate in 2024 its most robust performance since 2016. This marked a significant acceleration from 3.1% in 2023 and a mere 0.2% contraction in 2022. Though the North does not release official economic figures, the BOK’s annual estimates, grounded in intelligence and trade data, are widely regarded as the most credible source for evaluating the country’s economic health.

This sharp uptick was causally linked to two main developments: the expansion of national policy projects within North Korea and deepening economic cooperation with Russia. These external and internal shifts have spurred industrial output and altered the strategic direction of the North’s economic revival.

Heavy Industry and Mining Lead the Growth Story

The most notable gain came from the heavy chemical sector, which grew an unprecedented 10.7% the highest rate ever recorded in this category. This growth was directly associated with increased production of metal products, believed to be exported to Russia for military purposes. In parallel, the mining sector expanded by 8.8%, marking its strongest performance since 1999. These sectors benefited from both demand from Russia and state-driven industrial mobilization.

This growth pattern reveals a causal relationship between North Korea’s military-industrial production and external economic engagement, specifically with Moscow. It also signals Pyongyang’s pivot toward industrial rearmament as an economic engine, despite facing ongoing international sanctions.

Trade Remains Fragile but Exports Edge Higher

While overall trade volume fell by 2.6% to $2.7 billion still below pre-pandemic levels exports rose 10.8% to $360 million. Curiously, items such as wigs and watches were among the key contributors. This divergence indicates a correlational recovery in certain light industries, though trade remains a weak point in the broader economic profile.

Despite improvements, North Korea’s per capita gross national income was estimated at just 1.72 million won ($1,239), or 3.4% of South Korea’s 50.1 million won, underscoring the vast disparity that persists between the two Koreas. This stark contrast reaffirms that even with growth, North Korea remains deeply economically marginalized in global terms.

Geopolitical Alignment with Russia and China Shapes Outlook

North Korea’s economic resurgence is unfolding alongside a significant shift in its foreign relations. The country has sent armaments and troops to support Russia’s military operations in Ukraine a move that has intensified military and economic integration between the two nations. Simultaneously, leader Kim Jong Un is preparing to attend a major military parade in China, a rare public alignment with both Beijing and Moscow.

This strategic realignment both causally and symbolically linked to growth through geopolitical partnerships highlights North Korea’s bid to diversify its economic and diplomatic dependencies away from the West. It also suggests an emerging axis of sanctioned states cooperating to sustain each other through military and trade support.

North Korea’s 3.7% economic growth in 2024 reflects more than a numerical rebound it signals a broader strategic transformation. With Russia’s backing and China’s continued support, Pyongyang is leveraging industrial production and military exports to offset the constraints of global isolation. While structural weaknesses remain and income disparities with South Korea persist, North Korea’s integration into alternative trade networks may mark the beginning of a more durable, albeit politically risky, economic trajectory.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

News, historical chart data, and fundamental company data are provided by FastBull Ltd.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.