North Korea Set For A Slow Recovery In 2022

Key View

• We at Fitch Solutions expect North Korea to grow by 1.0% in 2022 and 1.0% in 2023 following two full years of contraction in 2020 (-4.5%) and 2021 (-0.1%).
• North Korea’s recovery in 2022 and 2023 will be mostly contingent upon greater trade with neighbouring China – the country’s main trading partner.
• The country is still suffering from the Covid-19 pandemic and it remains among the very few countries in the world where a vaccination programme has not started. This makes it more vulnerable to isolation over the coming months.

We at Fitch Solutions expect North Korea’s economy to average 1.0% growth over 2022 and 2023. This will be a recovery from two consecutive years of negative growth in 2020 and 2021 and indeed stronger than the decade average decline of 0.4% posted by the economy between 2011 and 2021. Our view is contingent upon the country opening its borders to China – North Korea’s largest and only trading partner – and as such, the risks to our forecasts are weighed to the downside especially since, North Korea continues to reportedly face challenges due to the Covid-19 pandemic.