SEOUL, October 24 (AJP) — North Korea's economy may have grown faster last year than the Bank of Korea estimated as wartime income from Russia, closer trade with China and cybercrime generated unusually strong external inflows, a U.S. expert said.
Troy Stangarone, co-chair of the North Korea Economic Forum at George Washington University's Institute for Korean Studies, said at a forum in Washington on Thursday that the external economic environment facing North Korean leader Kim Jong Un was the most favorable of his rule.
The Bank of Korea (BOK) estimated in July that North Korea's real gross domestic product expanded 3.5 percent in 2025, following growth of 3.7 percent in 2024 and 3.1 percent in 2023.
Stangarone said the actual rate may have been higher.
He argued that even if only part of the money believed to be flowing from Russia were reflected in available estimates, the sums would still represent a substantial source of income for an economy as small and closed as North Korea's.
The BOK produces annual estimates of North Korea's economy because Pyongyang does not publish internationally comparable national accounts.
Its calculations use information on economic activity collected by South Korean authorities and apply South Korean prices and value-added ratios, making them estimates of broad economic trends rather than conventional national accounts based on data released by the country itself.
Stangarone identified North Korea's rapidly expanding relationship with Russia as one of the main reasons its economic conditions may be stronger than official estimates suggest.
Pyongyang has deepened military and economic cooperation with Moscow during the war in Ukraine, providing troops and military supplies while gaining access to revenue and other forms of assistance.
Stangarone said those benefits may continue even after the war ends because Russia would still need to replenish ammunition and military equipment.
North Korea could continue receiving significant income from Russia for another two or three years after the conflict, he said.
Closer economic ties with China and proceeds from cybercrime have also strengthened Pyongyang's access to foreign currency, according to Stangarone.
The combination could help explain why North Korea's recent recovery appears relatively strong despite sanctions, limited access to foreign investment and longstanding weaknesses in domestic infrastructure.
The BOK estimated that North Korean manufacturing output increased 6.6 percent in 2025, while construction grew 6.3 percent and agriculture, forestry and fisheries expanded 3.6 percent.
The economy has now grown by more than 3 percent for three consecutive years after contracting 4.5 percent in 2020, 0.1 percent in 2021 and 0.2 percent in 2022.
North Korea's estimated growth rate also exceeded South Korea's over the same three years, compared with South Korean growth of 1.5 percent in 2023, 2.2 percent in 2024 and 1.1 percent in 2025.
The comparison, however, does not mean the North Korean economy is approaching South Korea in size or living standards.
A smaller economy can post a higher percentage growth rate from a much lower base, while North Korea remains only a fraction of South Korea's economic size.
The BOK estimated North Korea's nominal gross national income at 48.5 trillion won ($36.7 billion) in 2025, equivalent to just 1.8 percent of South Korea's 2,717.1 trillion won.
Per capita GNI stood at an estimated 1.87 million won in the North, compared with 52.57 million won in South Korea, leaving the South's figure about 28 times larger.
The central bank also cautions that its North Korean figures should not be interpreted with the same precision as statistics produced from conventional national accounts.
The larger question is whether Pyongyang can turn its current influx of external income into sustainable domestic growth.
Electricity, gas and water supply declined 0.4 percent in 2025 even as manufacturing and construction expanded, underscoring persistent weaknesses in the infrastructure needed to support industrial growth.
Stangarone said North Korea could continue building factories and industrial facilities but would struggle to translate them into lasting increases in production without enough electricity to operate them.
Pyongyang therefore faces a limited window to use the economic benefits of its ties with Russia, China and other external income sources to strengthen its productive capacity before the unusually favorable conditions begin to fade.
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