Sanctions coupled with the pandemic cripples North Korea’s economy to lowest level in 23 years

North Korea has adopted an autocratic model of governance that is centrally planned, socialist and self-reliant. The model emphasizes on the growth and development of industries and investments in sectors such as steel, cement, iron and machinery.

Kim-Jong-Un is presently the Supreme Leader of the nation. He has held this position since 2011. He also happens to be the grandson of Kim Il-sung, who was the founder and very first supreme leader North Korea has had since its establishment way back in 1948.

The world bank group reported North Korea had a GDP that was valued at $18 billion in 2019. By the end of 2023, the figure is projected to rise above $20 billion. Their economy contributes roughly 0.02% of the world’s GDP.


The country shares diplomatic and bilateral relations with over 160 independent states. China is its biggest ally holding the highest volume of trade presently.

North Korea mostly exports fake hair, watch movements, ferroalloys, tungsten ore, rubber working machinery to China, Saudi Arabia, Mozambique, Zambia and Pakistan.

Most of the imports of the isolated nation are from India, China, Russia, Brazil and Switzerland and the items are largely fertilizers, fabric and food related products such as soybean oil ,wheat flours, synthetic filament yarn woven fabric, nitrogenous fertilizers, light rubberized knitted fabric.

The country maintains diplomatic relations with India. It has an embassy in India’s capital New Delhi and India in return at Pyongyang, capital of North Korea. At one point of time India had been its biggest trading partner in terms of food aid but now China took over after relations between the two countries weakened.

In wake of the Covid-19 pandemic India provided medical assistance worth $1 million to North Korea


North Korean leaders and representatives are very secretive on a lot of things related to their nation. Therefore no one can really tell how deeply the nation has been hit by the pandemic. The country is yet to confirm a Covid-19 case but it did seal borders in wake of the pandemic making it more isolated and reclusive than before.

The central bank of South Korea has suggested that North Korea has suffered its biggest ever economic contraction in 23 years, all during the pandemic year. A lot of this was due to the sanctions imposed by the United Nations, lockdown restrictions and other measures to curb the spread of infection and poor weather conditions such as typhoons and heavy rains that hit the country.

Hana Institute of Finance in South Korea projected that the North Korean economy declined by a record 10% whereas Fitch Solutions said that it could have witnessed a contract of 8.5% in the previous year.

North Korea’s trade with China plunged by a record 80% during the pandemic year.

China accounts for nearly 90% of its trade volumes which fell to $539 million in 2020, of this exports to China was worth at least $48 million, this fell by a little more than 77.5% compared to 2019 levels and imports from China on the other hand went down by more than 80.5% reaching a figure of $491 million.

The fall in trade resulted in massive food shortages and the poor weather conditions added on to this crises. All these conditions triggered massive price surges.

“The exchange rates likely increased because there were less foreign currencies available after trade and smuggling with China was cut and North Korea sealed off some areas where any suspected COVID-19 cases came out,” said Kang Mi-jin, economist and market data analyst for The Daily NK.