Introduction

The factors that led North Korea’s economic growth in 2016 all worked against the country’s industry and real economy in 2017. Climate conditions, which was at least a neutral factor in 2016, brought a prolonged drought that affected North Korea’s agriculture and hydropower generation.

The drought, which began early in the year and continued up to September 2017, appears to have negatively impacted North Korea’s agricultural production and hydropower generation. As a result, agricultural production saw a slight decline, and despite the minor increase in thermal power generation, overall power generation would have also decreased slightly or stagnated due to the fall in hydropower output. Also, in 2016, the economic sanctions against North Korea still allowed the country’s overall trade volume to grow, mainly through trade with China, but in 2017, North Korea saw a large drop in its trade volume, including a 66% drop in their export of anthracite coal to China. Moreover, it is speculated that the massive blow faced by export-oriented mining led to a significant decrease in North Korea’s mining industry as a whole, despite the slight increase in mining for domestic use.

* This article is part of 2017 The DPRK Economic Outlook

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