North Korea's Economic Growth Rate at -8.5% This Year... Harder Than During the 'Arduous March'

International Credit Rating Agency Fitch Outlook
Downward Revision from Initial -6%
Impact of COVID-19 and North Korea-China Border Closure

North Korea is strengthening its hygiene and quarantine efforts against the novel coronavirus disease (COVID-19), according to a report by the Korean Central News Agency on the 10th.
The photo shows officials conducting quarantine measures at an eyeglasses store in Pyongyang.

International credit rating agency Fitch has downgraded North Korea's gross domestic product (GDP) growth forecast for this year to -8.5%. The company initially projected North Korea's growth rate at 3.7% for this year but lowered it to -6% in May following the COVID-19 pandemic, and has adjusted it again three months later. If North Korea's growth rate records -8.5% as forecasted, it would be lower than during the "Arduous March" period in 1997 (-6.5%).

Fitch Solutions, a subsidiary of Fitch, recently reported that considering the global increase in uncertainty, the contraction of the Chinese economy, and ongoing sanctions against North Korea, it forecasts North Korea's economic growth rate this year at -8.5%, according to the Voice of America (VOA) broadcast on the 11th (local time).

Fitch Solutions stated, "Due to the continued spread of COVID-19, the global economy remains bleak and uncertainty continues to rise, leading us to downgrade the global economic growth rate to -3.5% this year, which will also impact North Korea."

In particular, China's economic growth rate, North Korea's largest trading partner, is expected to slow to 2.2% this year, the worst in 30 years, which is likely to be a direct blow to North Korea. Since the COVID-19 outbreak, North Korea and China have closed their borders from the beginning of the year.

Fitch Solutions predicted, "Although North Korean authorities may strengthen construction activities to drive growth, the construction industry will also face difficulties this year due to uncertainties caused by COVID-19 and disruptions in raw material supply." It also assessed that "if a large-scale COVID-19 outbreak occurs in North Korea, the economic situation risks worsening further."

This content was produced with the assistance of AI translation services.