North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment, shortages of spare parts, and poor maintenance. Large-scale military spending draws off resources needed for investment and civilian consumption. Industrial and power output have stagnated for years at a fraction of pre-1990 levels. Frequent weather-related crop failures aggravated chronic food shortages caused by on-going systemic problems, including a lack of arable land, collective farming practices, poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel. Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Since 2002, the government has allowed private "farmers' markets" to begin selling a wider range of goods. It also permitted some private farming - on an experimental basis - in an effort to boost agricultural output. In December 2009, North Korea carried out a redenomination of its currency, capping the amount of North Korean won that could be exchanged for the new notes, and limiting the exchange to a one-week window. A concurrent crackdown on markets and foreign currency use yielded severe shortages and inflation, forcing Pyongyang to ease the restrictions by February 2010. In response to the sinking of the South Korean destroyer Cheonan and the shelling of Yeonpyeong Island, South Korea's government cut off most aid, trade, and bilateral cooperation activities, with the exception of operations at the Kaesong Industrial Complex. In preparation for 2012, the 100th anniversary of KIM Il-sung's birthday, North Korea continued efforts to develop special economic zones with China and expressed willingness to permit construction of a trilateral gas pipeline that would carry Russian natural gas to South Korea. The North Korean government often highlights its 2012 goal of becoming a "strong and prosperous" nation and attracting foreign investment, a key factor for improving the overall standard of living. Nevertheless, firm political control remains the government's overriding concern, which likely will inhibit changes to North Korea's current economic system.

North Korea does not publish reliable National Income Accounts data; the data shown here are derived from purchasing power parity (PPP) GDP estimates for North Korea that were made by Angus MADDISON in a study conducted for the OECD; his figure for 1999 was extrapolated to 2011 using estimated real growth rates for North Korea's GDP and an inflation factor based on the US GDP deflator; the results were rounded to the nearest $10 billion.

Estimates vary widely (2009 est.)

Excludes earnings from state-operated enterprises (2007 est.)

Rice, corn, potatoes, soybeans, pulses; cattle, pigs, pork, eggs

Military products; machine building, electric power, chemicals; mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing; tourism

Minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products

China 46.5%, South Korea 40.8%, Bangladesh 1.4% (2010 est.)

Petroleum, coking coal, machinery and equipment, textiles, grain

China 64.5%, South Korea 24.6%, Russia 2.4% (2010 est.)

North Korean won (KPW) per US dollar (market rate)