SEOUL (July 31): North Korea's economy grew 3.5% in 2025, fuelled by growing trade with Russia and China, for a third consecutive year of growth exceeding 3%, according to estimates by South Korea's central bank released on Friday.

That was slightly less than expansion of 3.7% in 2024, but economic output for the secretive Communist state was estimated to have surpassed 2017 levels before UN sanctions on Pyongyang took full effect.

"The growth was mainly due to expansion of economic cooperation between North Korea and Russia, along with increased trade with China and the government's push on state-led development projects," a central bank official told a briefing.

Export demand for North Korea's weapons lifted output across the manufacturing supply chain, the official said, while a surge in Russian tourists and greater transport links boosted lodging, food service and travel.

Income from North Korean labourers dispatched abroad and troops sent to support Russia's war effort also sharply boosted foreign currency earnings.

Manufacturing grew 6.6%, with light industry swinging to growth of 3.8% from a contraction of 0.7% in 2024, which the official linked to a policy dubbed "20x10" that aims to build 20 light-industry factories in provincial areas each year for a decade.

Construction grew 6.3%, with civil engineering tied to domestic infrastructure projects such as roads, railways and power plants.

Mining growth slowed sharply to 1.6% from 8.8% a year earlier, which the BOK attributed to a decline in coal output. Services grew 1.8%, their fastest pace since 1994.

The North's trade volume, excluding transactions with South Korea, rose 16% to US$3.13 billion.

Exports climbed 30% to US$470 million on shipments of toys, feathers, down and wigs, while imports rose 13.9% to US$2.66 billion on apparel and animal and vegetable fats and oils.

Pyongyang has deepened ties with both Moscow and Beijing.

Foreign Minister Choe Son Hui met Russian President Vladimir Putin in Moscow this month. North Korea has also stepped up exchanges with China marking the 65th anniversary of their friendship and mutual defence treaty on July 11.

Recent growth notwithstanding, North Korea's economy remains very small. Nominal gross national income was estimated at 48.5 trillion won (US$34 billion) last year, equivalent to 1.8% of the South's.

South Korea's central bank has been publishing estimates of the North Korean economy since 1991, based on data from South Korea's intelligence and trade agencies in the absence of official statistics from Pyongyang.

Uploaded by Liza Shireen Koshy