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N. Korea's GDP down 4.1% in 2018, biggest contraction since 1997

In this Oct. 27, 2018 file photo, a man rides his electric bike as the Tower of the Juche Idea is silhouetted against the sunrise in Pyongyang, North Korea. (AP Photo/Dita Alangkara)

SEOUL (Kyodo) -- South Korea's central bank announced Friday that North Korea's gross domestic product in 2018 was down 4.1 percent from the previous year, marking the largest contraction in the country's economy in over two decades.

The decline exceeded the previous year's 3.5 percent negative growth. North Korea's economy last registered positive growth in 2016, when it expanded 3.9 percent.

The last time the country felt an economic contraction sharper than last year's was in 1997 during the so-called "hard march," when food shortages were rampant.

An official of the Bank of Korea attributed the latest stark result partly to the impact of U.N. sanctions against North Korea, which began in August 2017.

That was when the U.N. Security Council, in the wake of the country's intercontinental ballistic missiles launches, totally banned exports of North Korean coal and other products.

After that, sanctions were tightened by setting an annual cap on refined petroleum products supplied to North Korea.

By industry, mining production fell sharply with a 17.8 percent decrease compared with the previous year. It is believed to be the result of the ban on its coal exports.

Manufacturing production contracted by 9.1 percent mainly due to a retreat in its heavy and chemical industries.

Production in the agriculture, forestry and fishing sector fell by 1.8 percent.

The value of North Korea's external trade, excluding goods transported between North and South Korea, decreased by 48.8 percent to $2.84 billion in 2018, marking the lowest level in the past decade.

Its exports in U.S. dollar terms totaled $240 million, a decrease of 86.3 percent compared to the year before, while imports totaled $2.60 billion, down 31.2 percent from the year before.

Goods transported between the two Koreas were valued at $31.3 million in 2018, mainly due to non-commercial transportation of equipment used in the maintenance of the inter-Korean liaison office in Kaesong, on the North Korean side of the border.

Since the shutdown of a jointly operated industrial complex in Kaesong in 2016, there has been almost no trade between North and South Korea.

The BOK also said North Korea's gross national income per capita in 2018 was 1.42 million won (approximately $1,120) in South Korean won terms, or about 3.9 percent of South Korea's per capita GNI.

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