NKs Economy Records 1st Growth in 3 Years
- ️KoreaTimes
- ️Sun Jun 28 2009
2 Koreas a League Apart in Economic Size
By Oh Young-jin
Staff Reporter
North Korea's economy expanded 3.7 percent year-to-year last year, the first growth in three years.
According to the Bank of Korea (BOK) Sunday, the North outstripped the South in terms of growth rate for the first time in a decade. Last year, the South's gross domestic product (GDP) grew 2.2 percent. At the start of the currency crisis in 1998, the South's GDP contracted 6.9 percent, while the North saw its GDP dwindle by 1.1 percent.
However, this comparison would be made less significant, considering Seoul's gross national income (GNI) ― a broader measure of the size of an economy ― was an estimated 37.7 times larger than the North's. In 2007, the ratio was 39.3-to-one in a revised BOK figure. Per capita GNI for the North in 2008 was calculated at 1.17 million won against the South's 22.1 million won on the basis of the South Korean currency.
The North's trade volume was estimated at $3.82 billion _ $2.69 in imports and $1.13 in exports. Its total trade volume was 224 times smaller than the South's. In 2007, the South's economy was 248 times larger than the North's.
The central bank said that the North's economic growth is attributable to one-off factors.
"North Korea's growth last year came as favorable climate conditions increased crop production and foreign countries granted energy aid to Pyongyang. It does not seem that the North's economic momentum has improved," the central bank said in the report.
The BOK published the economic growth estimate of the North based on data provided by the National Intelligence Agency, South Korea's spy agency, and other institutes specializing in North Korean studies.
The North's agricultural sector expanded 8.2 percent annually in 2008, following a contraction of 9.4 percent for 2007, according to the BOK.
Due to increasing exports by the North, the gap between the two Korea's economies narrowed last year.
North Korea's nominal GNI stood at 27.3 trillion won ($21.31 billion) in 2008, 2.7 percent of South Korea's GNI of 1,030.6 trillion won.
Inter-Korean trade gained 1.2 percent on-year to $1.8 billion, although South Korean shipments to the North slumped 14 percent to $888.1 million due to a cuts in government aid and private assistance to Pyongyang.
The value of North Korean products shipped to the South reached $932.3 million, up 21.8 percent from the previous year, thanks mainly to goods made at the Gaesong Industrial Complex.
The industrial park, located just north of the demilitarized zone that separates the two Koreas, is home to about 100 South Korean companies. It has recently been thrown into turmoil by unilateral wage and rent demands from North Korea.