North Korea's economy grows at 3%-plus rate for 3rd straight year, Bank of Korea says

North Korea's economy grew at a rate above 3 percent for the third consecutive year in 2025, driven by weapons exports and expanded economic cooperation with Russia, including tourism.

The Bank of Korea released its "2025 North Korean Economic Growth Rate Estimate" on Friday, showing North Korea's real GDP reached 38.26 trillion won ($26.6 billion) last year, up 3.5 percent from the previous year's 36.97 trillion won. The Bank of Korea estimates North Korea's growth rate and other statistics using the UN System of National Accounts methodology.

North Korea posted growth rates of 3.1 percent in 2023 and 3.7 percent in 2024, making last year's expansion the third straight year above 3 percent. In each of those three years, North Korea's growth rate was roughly three times South Korea's, which recorded 1.1 percent growth last year.

North Korea's real GDP last year surpassed the 37.74 trillion won recorded in 2017, when UN economic sanctions against the North began in earnest, the Bank of Korea said. Seo Jeong-seok, head of the bank's national income team, said expanded economic cooperation with Russia was particularly influential in last year's growth. "As weapons exports increased, output rose across manufacturing industries linked to the defense sector," he said. "The services sector — including construction, accommodation, food service and transportation — also grew as the number of Russian tourists increased and related transport infrastructure was expanded." He added that foreign currency earnings from North Korea's troop deployment to Russia also surged in terms of gross national income.

On the domestic side, expanded investment in light industry through North Korea's "Local Development 20×10 Policy" also contributed to growth, the bank said.

By sector, manufacturing grew 6.6 percent as both light industry and heavy and chemical industries expanded, though the pace slowed from 7 percent the previous year. Construction rose 6.3 percent, driven by non-residential building and civil engineering projects. Agriculture, forestry and fishing grew 3.6 percent, reversing a 1.9 percent decline the year before thanks to favorable weather conditions. Mining, however, slowed to 1.6 percent growth from 8.8 percent the prior year as coal output fell. Electricity, gas and water utilities contracted 0.4 percent as thermal power generation declined. The services sector grew 1.8 percent, its highest growth rate since 1994, when it expanded 2.3 percent — with the government sector up 1 percent and retail and other industries up 5.1 percent.

In terms of industrial structure, mining and manufacturing accounted for the largest share of North Korea's economy at 30.1 percent, followed by services at 29.6 percent and agriculture, forestry and fishing at 21.2 percent. The shares of agriculture, forestry and fishing (20.9 percent to 21.2 percent) and utilities (7.2 percent to 7.4 percent) edged up from the previous year, while mining and manufacturing (30.5 percent to 30.1 percent) and services (29.8 percent to 29.6 percent) slipped slightly.

North Korea's nominal gross national income stood at 48.5 trillion won in 2025, up 9.4 percent from the previous year — equivalent to about 1.8 percent, or one fifty-sixth, of South Korea's 2,717.1 trillion won.

Per capita GNI was 1.87 million won, roughly 3.6 percent — or one twenty-eighth — of South Korea's 52.57 million won. North Korea's total external trade in goods (excluding inter-Korean transfers) reached $3.13 billion in 2025, up 16 percent from $2.7 billion the previous year.

Exports rose 30 percent year-on-year to $470 million, led by processed feathers, wigs, and toys and sporting goods. Imports grew 13.9 percent to $2.66 billion, driven by increases in clothing and animal and vegetable fats and oils.

There was no inter-Korean trade last year. Inter-Korean transfers, which reached $332.6 million in 2016, collapsed after the Kaesong Industrial Complex was shut down that year, falling to $3.9 million in 2020, $1.1 million in 2021 and $100,000 in 2022. There has been no inter-Korean trade for three consecutive years, from 2023 through last year.