Real GDP reached 97.8% of 2016 levels in 2025, but per capita GDP remains at about 94%; construction surged to 128% while mining languishes at 69%

This image is unrelated to the article. [Getty Images Bank]
This image is unrelated to the article. [Getty Images Bank]

North Korea's economy has grown for three consecutive years since 2023, showing signs of emerging from the slump that followed tightened international sanctions — but the recovery in living standards for ordinary residents has lagged behind, an analysis found. While the country's overall output has nearly returned to levels seen a decade ago, real GDP per capita remains below its 2016 mark.

According to a presentation at a roundtable on inter-Korean agricultural cooperation hosted by the Korea Rural Economic Institute on Friday, Choi Ji-young, a senior research fellow at the Korea Institute for National Unification, estimated that North Korea's economy grew 3.1 percent in 2023, 3.7 percent in 2024 and 3.5 percent in 2025.

North Korea's real GDP stood at 97.8 percent of its 2016 level in 2025, while real GDP per capita reached only about 94 percent of that benchmark. By sector, construction surged to 128 percent of its 2016 level, utilities — electricity, gas and water — reached 105 percent, and the service sector hit 104 percent. Heavy and chemical industries recovered to just 85 percent, while mining remained the weakest at 69 percent.

North Korea's economy contracted sharply under tightened sanctions and the border closures imposed during the COVID-19 pandemic. Real GDP fell to 88.4 percent of its 2016 level in 2022 before recovering to 91.2 percent in 2023, 94.5 percent in 2024 and 97.8 percent in 2025.

The recovery in per capita real GDP — a measure of individual living standards — has been slower. It dropped to 85.8 percent of the 2016 level in 2022 and, despite recent gains, has only climbed back to around 94 percent.

The pace of recovery has varied sharply across industries. Construction expanded to 128 percent of its 2016 output, driven by large-scale housing projects and regional development initiatives.

Mining, by contrast, recovered to only 69 percent of its 2016 level, and heavy and chemical industries to 85 percent. Utilities and the service sector both surpassed their 2016 output, reaching 105 percent and 104 percent, respectively.

Choi characterized the recent trajectory of North Korea's economy as an "uneven recovery," noting that the pace of recovery differs not only between aggregate output and per capita income, but also across individual industries.

North Korea is pursuing a new five-year national economic development plan covering 2026 to 2030, following the Ninth Party Congress. The plan moves away from the previous focus on stabilizing the people's economy through maintenance and reinforcement, instead aiming to accelerate manufacturing growth and continue the "20×10 policy" for regional development.

The plan envisions driving manufacturing expansion through large-scale new investment and the modernization and efficiency improvements of existing production facilities, while boosting output by upgrading power and infrastructure capacity. Agricultural and construction sectors are expected to continue domestic demand-stimulation policies.

However, analysts cautioned that a recovery in aggregate output does not necessarily translate into improved living conditions for residents. Concerns were also raised that the expansion of state-led construction and regional development projects could increase the informal financial burden on ordinary citizens.

Choi proposed that, in the short term, North Korea should maintain state procurement while reducing fees levied on the private sector and cutting extra-budgetary burdens, in order to raise farmers' real incomes. Over the medium to long term, she said, reforms aimed at improving agricultural productivity and revitalizing local manufacturing industries would be necessary.


adastra@heraldcorp.com