Seoul: North Korean economy shrinks for 1st time in 5 years

AP News
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Posted: Jul 22, 2016 6:36 AM

SEOUL, South Korea (AP) — South Korea's central bank said North Korea's economy shrank 1.1 percent last year, in its first contraction in five years.

The Bank of Korea said Friday that its estimates showed the impoverished economy likely contracted mainly because of a huge downturn in power generation and manufacturing. Drought was blamed for the lower power generation in its hydroelectric power industry, it said.

North Korea has rich natural mineral resources, but its output of iron ore and other resources also fell last year.

The 1.1 percent decline was the worst performance for the reclusive country since a 1.2-percent contraction in 2007. Since Kim Jong Un took power following the death of his father in late 2011, North Korea's economy has averaged about 1 percent growth annually.

The bank said North Korea's overseas trade fell 18 percent to $6.25 billion last year from the year before.

The South Korean central bank estimates North Korea's economic growth based on data from South Korean government agencies, relative to data in South Korea. The bank said those figures should not be used to make comparisons with countries other than South Korea.

North Korea is facing international financial and economic sanctions for its nuclear and missile activities.