Against the odds, N. Korea posts growth in 2011: BOK

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Against the odds, N. Korea posts growth in 2011: BOK

The North Korean economy is believed to have marginally grown last year after contracting for two straight years on increased agricultural production, the central bank said yesterday.

The Bank of Korea estimated that the Stalinist state’s economy expanded 0.8 percent on-year in 2011, compared with a 0.5 percent contraction a year earlier.

The 2011 data contrasted with a 3.6 percent expansion of the South Korean economy.

The central bank estimated earlier that the North’s economy had shrunk for two consecutive years.

In 2009, it fell 0.9 percent, according to the bank.

“Despite a contraction in the manufacturing sector, the North’s economy grew last year as agricultural production rose, aided by favorable weather conditions and a rise in the use of fertilizer,” said Park Yung-hwan, an economist at the BOK.

The BOK releases an economic growth estimate for the North each year based on data provided by Seoul’s intelligence agency and other institutes specializing in North Korean studies.

The North Korean economy has been in the doldrums as it suffers from chronic food and energy shortages, persistent mismanagement and natural disasters.

It has relied on international handouts since 1995 to help feed its 23 million people.

The North’s agricultural and fishery industry grew 5.3 percent on-year in 2011, a turnaround from a 2.1 percent contraction the previous year, the bank said. Its manufacturing sector declined 3 percent last year after falling 0.3 percent in 2010.

The North’s nominal gross national income amounted to 32.4 trillion won ($28.5 billion) last year, which is equivalent of 2.6 percent of South Korea’s 2011 GNI of 1,241 trillion won, the bank said.

Meanwhile, inter-Korean trade fell 10.4 percent on-year to $1.71 billion, the bank said.

Park said shipments of goods produced at a joint industrial complex at the North’s border city of Kaesong accounted for most inter-Korean trade last year.

Chilly inter-Korean relations and punitive international sanctions cut off the flow of humanitarian aid to the North, he said.

The relationship between the two Korea has been on a standstill under the Lee Myung-bak administration.

The value of the North’s products shipped to the South declined 12.5 percent, while reverse trade fell 7.8 percent, the BOK added.

Yonhap

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