The South Korean central bank’s annual report on its northern neighbor — due for release later this month — will provide a fresh look at the impact of U.S. President Donald Trump’s pressure campaign just as the two sides prepare to restart talks. While North Korea’s isolation, secrecy and dearth of official statistics make estimates difficult, the economy probably contracted more than 5% last year, according to Kim Byung-yeon, an economics professor at Seoul National University.
“As long as sanctions remain, time is on the U.S. side,” said Kim Byung-yeon, who also wrote the book “Unveiling the North Korean Economy.” “Sanctions are the most effective means to draw North Korea into negotiations, so they should not be lifted or eased without major progress on denuclearization.”
A decline of 5% would mean that international curbs on North Korean trade — measures crucially backed by China — have put the country on its weakest economic footing since 1997. Back then, the isolated nation was reeling from policy missteps under Kim Jong Il and a famine so bad some defectors reported rumors of cannibalism.