Macroeconomic Forecast North Korea

BMI View: North Korea does not publish economic data, regarding this as a state secret. Thus, the only reliable estimates are provided by the South's central bank (Bank of Korea, BoK). The BoK reported on August 16 2007 that North Korea's GDP shrank in 2006, for the first time since 1998, by 1.1% owing to weaker agriculture and construction sectors, and tighter international sanctions. The average growth rate between 1999 and 2005 was 2.9%. BMI forecasts a further contraction in 2007, owing to severe floods over the summer which caused widespread damage. We see the positive growth from 2008, as Pyongyang's international position improves.

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