North Korea’s economy facing collapse as missile programme sanctions hit hard

SANCTIONS have pushed North Korea’s economy to the brink of collapse, statistics suggest.

Its economy contracted by 3.5 percent in 2017, a sharp reverse from the 3.9 per cent growth in the previous year, The Korea Times reported. The 2018 figure is almost certain to be worse due to sanctions on the regime’s nuclear and missile programmes.

A report issued by the Korea Institute for International Economic Policy (KIEP) estimates that the North’s GDP could have shrunk by 5 per cent.

A second study, by the Korea Development Institute, said the country’s allimportant trade with China was hit hard by sanctions, falling more than 50 per cent in 2018 to a value of $2.46billion (£1.87billion) from $4.98billion in the previous year.

Exports totalled $220million in 2018, an 87 per cent decline from the $1.65 billion reported a year earlier.

Imports from China also suffered, falling 33 per cent to $2.24billion in 2018. As a consequence, North Korea’s trade deficit with its neighbour and closest ally climbed to $2 billion in 2018, the highest deficit ever recorded between the two nations.

“The year 2019 will be particularly gruelling for the country, given that sanctions will remain in place,” Jeong Hyung-gon, a KIEP researcher, said. “As the US will maintain maximum pressure without tangible denuclearisation steps by the North, the regime will suffer much more seriously than what has been seen thus far,” he added.

Stephen Nagy, of Tokyo’s International Christian University, said Kim’s “gamble” of demanding that the sanctions be lifted in return for minimal concessions during his summit in Hanoi with Donald Trump backfired.

“I think he expected the US president to be in the mood to bargain because of his domestic political problems and the need to score a political win,” he told The Daily Telegraph. “But Kim lost that bet.”