An open-market North may create 77 trillion won in investmentsNorth Korea may create as much as 77 trillion won ($68.1 billion) in additional construction investment between 2021 and 2030 if the reclusive country fully opens its market, a report published by the Bank of Korea (BOK) said Tuesday.
According to the report, North Korea’s new construction investment could reach 65 trillion won by 2020, with a potential 0.6 percent rise in housing demand coming from people looking for better housing.
It continued saying that the country’s housing demand will likely slow down to 0.3 percent in the next 10 years, partly due to slowing population growth and aging, while 57 trillion won worth of construction investment will be made over the 2021-30 period.
But the report noted that the figures are expected to expand further over the next decade if the North Korean regime opens its market fully by 2021.
“The opening of the market usually comes with an upgrade in quality of life, such as a drop in infant mortality. [The rising quality of life] will lead to a growth in household income and housing demand,” said author Lee Joo-yung, a senior economist at the BOK. “As a result, the report assumes that the opening of the market will help demand for new houses increase in North Korea by an additional 0.6-1.8 percentage points on average annually.”
If the North pulls off a 1.8 percentage point expansion in its housing demand between 2021 and 2030, the report says the country’s construction investment will likely reach 134 trillion won, 77 trillion won more than under a closed-market scenario.