Economy of North Korea

The economy of North Korea is a centrally planned economy, following Juche, where the role of market allocation schemes is limited, although increased to an extent. As of 2024, North Korea continues its basic adherence to a centralized planned economy. With a total gross domestic product of $28.500 billion as of 2016, there has been some economic liberalization, particularly after Kim Jong Un assumed the leadership in 2012, but reports conflict over particular legislation and enactment. Since the 1990s, informal market activity has increased, which the government has tolerated. These markets are referred to as 'Jangmadang', and were formed as a result of the economic collapse during the 1990s, which made the regime unable to distribute food to its people.

After the start of the COVID-19 pandemic, the government tightened border control and began major crackdowns on private economic activities with a shift to a state-run monopoly on food sales, followed by greater centralization of foreign trade, and overall control over the economy.

The collapse of the Eastern Bloc from 1989 to 1992, particularly North Korea's principal source of support, the Soviet Union, forced the North Korean economy to realign its foreign economic relations, including increased economic exchanges with South Korea. China is North Korea's largest trading partner. North Korea's ideology of Juche has resulted in the country pursuing autarky in an environment of international sanctions. While the current North Korean economy is still dominated by state-owned industry and collective farms, foreign investment and corporate autonomy have increased.

North Korea had a similar GDP per capita to its neighbor South Korea from the aftermath of the Korean War until the mid-1970s, but had a GDP per capita of less than $2,000 in the late 1990s and early 21st century. For the first time, in 2021, the South Korean Ministry of Unification estimated that the North Korean private sector outgrew the public sector until 2020. However, the 8th Congress of the Workers' Party of Korea introduced new policies in 2021 which aim to strengthen the old command economy; it has been gradually implementing these policies forcing markets and private economic activities to significantly shrink.