The January issue reviews North Korea’s economic performance in 2025―the final year of the five-year national economic development plan―and assesses key factors shaping the outlook for 2026. The economy has moved beyond the COVID-19 border-closure shock, showing a recovery led by the official sector where the state concentrates resources and control. This recovery, however, remains narrow in scope. Trade with China has rebounded toward pre-sanctions levels, and closer cooperation with Russia has supported selected industries, though spillovers to markets and private activity remain limited. Industrial and agricultural output improved under a strategy of policy prioritization and regional development, aided by favorable weather conditions. Fiscal conditions also appear to have entered a phase of gradual normalization from 2024.
In contrast, market indicators have weakened. Stronger state control over trade and distribution has coincided with sharp exchange-rate depreciation and persistent inflation, eroding households’ real purchasing power and exposing structural constraints that limit the diffusion of official-sector gains. With the 9th Party Congress approaching, 2026 represents a critical turning point. The durability of centralized economic management, prospects for exchange-rate and price stability, and changes in the external environment will be decisive in shaping North Korea’s economic path ahead.