Bloomberg: North Korea’s economy rebounds amid arms transfers with Russia

North Korea’s economy showed significant signs of recovery in 2023, buoyed by increased arms transfers with Russia.

The nation's Gross Domestic Product (GDP) expanded by 3.1% from the previous year, marking the strongest growth since 2016, according to estimates released by South Korea’s central bank, Caliber.Az reports via Bloomberg.

This rebound ends a three-year period of economic contraction, highlighting a notable shift in North Korea's economic trajectory.

The recent growth spurt coincides with North Korea's closer relations with Russia, as well as the lifting of stringent border restrictions that had been in place since the onset of the COVID-19 pandemic. These restrictions had severely impacted trade and exacerbated the effects of international sanctions on North Korea's economy. The Bank of Korea (BOK) report highlighted a substantial increase in the heavy and chemical industries, which grew by 8.1% year-over-year. The surge in production of primary metals, potentially including iron, steel, copper, nickel, and aluminium, suggests a significant uptick in industrial activity.

While the BOK report did not directly confirm the involvement of North Korean industries in arms manufacturing, it comes amid heightened scrutiny from the international community. The United States and South Korea have accused North Korea of supplying munitions and ballistic missiles to Russia, aiding its ongoing military operations in Ukraine. Despite Moscow and Pyongyang denying these allegations, evidence of arms shipments has emerged, raising concerns about the implications of such transfers for regional and global security.

In addition to military cooperation, North Korea has reportedly received crucial materials and food staples from Russia. These supplies have played a role in stabilizing domestic prices and supporting manufacturing sectors, according to South Korean officials. However, the exact economic value of these exchanges remains unclear, as the figures were not disclosed in the BOK's report.

North Korea's economic revival comes at a time of increased diplomatic isolation and heightened rhetoric against the US and South Korea. The growth driven by heavy industry and arms-related activities underscores the regime's reliance on strategic partnerships, notably with Russia, to navigate through international sanctions and domestic challenges.