Chanel, Omega spotted in Pyongyang department store as North Korea enjoys unprecedented boom

North Korea is enjoying an unprecedented economic boom driven by expanded cooperation with Russia, including troop deployments to Ukraine and arms exports, foreign media analysis shows. However, analysts say the influx of foreign currency is unlikely to translate into fundamental economic change.

According to the Financial Times, Pyongyang has recently seen a construction boom and a sharp rise in consumer activity, the British daily reported Friday.

High-rise apartment complexes have gone up across the capital, and luxury brands including Omega and Chanel — imported through China via parallel trade channels — are on display and for sale at the Daesong department store.

An Ikea store has also been spotted inside the Ryugyong Kumbit commercial complex, a mixed-use shopping center.

Experts said retail activity has picked up noticeably over the past two years. "Pyongyang has become visibly more prosperous and consumption-oriented," said Rachel Minyoung Lee, a senior analyst at the Stimson Center, a Washington-based think tank.

The economic upturn is rooted in expanded North Korea-Russia cooperation, centered on troop deployments to Ukraine and arms exports.

According to the Institute for National Security Strategy, North Korea earned an estimated $7.7 billion to $14.4 billion by sending troops to Russia and exporting munitions between August 2023 and the end of last year — equivalent to as much as 20 trillion won.

Growing trade with China and cryptocurrency theft have also bolstered the country's foreign currency earnings.

According to the Stimson Center, North Korea's exports to China in the first five months of this year rose 68 percent compared with the same period last year.

Blockchain intelligence firm TRM Labs estimated that hackers linked to North Korea stole $643 million worth of virtual assets in the first half of this year.

The Financial Times assessed that the recent boom has limited potential to bring about fundamental change in North Korea's economy, as the government continues to tighten its grip and suppress private economic activity.

"Given North Korea's tendencies, it won't prepare for the future when times are good," said Peter Ward, a North Korea specialist at the Sejong Institute.