Why Did North Korea's Market Prices Surge Sharply in February and April?

[Asia Economy Reporter Kim Dong-pyo] It has been revealed that North Korea's market prices surged twice this year, in February and April. However, market prices showed a rapid decline again, which is analyzed to have been influenced by anxiety caused by the novel coronavirus infection (COVID-19).

On the 30th, Choi Ji-young, a research fellow at the Korea Institute for National Unification, explained this in an interview with the KDI Northern Economy Office published in the November issue of the Korea Development Institute (KDI) North Korean Economic Review under the theme "North Korea's Prices and Exchange Rates: Trends and Analysis."

Regarding the sudden price surge in early February, Research Fellow Choi stated, "It seems that the price surge occurred as a result of expanded psychological anxiety among North Korean households after the sudden closure of the North Korea-China border in early February." It is analyzed that, similar to some other countries at the early stage of COVID-19 spread, a kind of panic buying phenomenon appeared in North Korea as well.

He said, "Especially in North Korea, where food is scarce, the expansion of psychological anxiety likely led to stockpiling demand, causing prices to surge in early February." However, regarding the background of the rapid price decline afterward, he added, "It seems to have calmed down easily unless the actual shortage of goods worsens."

The price surge at the end of April was judged to be a temporary phenomenon due to various policy changes such as North Korea's 'import restriction orders.'

Research Fellow Choi said, "(At that time) there was an order not to import unless absolutely necessary, and if the North Korean authorities are attempting policy shifts in response to prolonged sanctions or the COVID-19 situation, prices may have risen as a result."

He added, "Although the upward trend at the end of April soon turned downward, currently, prices of corn and pork have rebounded with an upward trend compared to the same period last year." He also noted that food price increases due to supply shortages were observed, especially as the lean season (Chungunggi) began.

Research Fellow Choi concluded, "In conclusion, it appears that temporary shocks occurred in early February and late April in the first half of this year regarding prices," and said, "Whether due to the COVID-19 situation or policy changes, it is clear that volatility expanded because of some kind of shock."

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