North Korea is under “mounting economic pressure” as food shortages and sanctions hammer the secretive dictatorship, analysts have warned.
The warning from ratings agency Fitch comes after the totalitarian state’s supreme leader Kim Jong-un said the country faced its “worst ever situation” and raised the spectre of the Nineties famine which killed almost 3m people.
North Korea does not publish statistics but researchers at Fitch Solutions - one of the few outlets to monitor North Korea's economy - estimate the country suffered its worst year in decades during 2020 after an 8.5pc slump.
The lingering effect of Kim’s Covid-19 shutdown and the tougher economic sanctions in place since a series of nuclear tests and rocket launches in 2017 will limit any growth recovery this year to just 0.5pc, Fitch said.
The scale of the crisis facing Pyongyang was underlined by the recent exit of Russian embassy staff - one of the few countries to maintain diplomatic relations with the dictatorship - as officials complained of “unprecedented” restrictions of movement as well as shortages of basic goods and medicines.
Kim, who has ruled the state for ten years, called for another “arduous march” earlier this month in a speech to party officials, in an echo the phrase used to describe the Nineties famine when starving citizens were forced to eat tree bark to stay alive.
Although North Korea is not facing a famine on that scale shortages are “acute” according to local reports. Pork prices have jumped almost 60pc in the past six months and corn prices have hit the highest level since 2009, Fitch said.
A United Nations report warned last year that more than 10m people in North Korea were in “urgent need of food assistance” but the UN now has just a handful of staff on the ground following the pandemic.
Progressively tightening sanctions have meanwhile cut the country’s trade with the rest of the world by almost 90pc over the past two decades.
Anwita Basu, head of Asia at Fitch Solutions, said: “Overall, we do not expect to see a relaxation of international sanctions on North Korea any time soon, as the Biden administration is unwilling to reward Pyongyang without the latter making a tangible gesture in relation to abandoning its nuclear weapons programme.”
The country’s biggest trade partner, China, is set to resume a cargo train service with North Korea next month after both countries closed their border due to the pandemic.
Ms Basu added: “However, even if trade with China recovers in a substantial way, we believe that on balance this will not add positively to growth in North Korea as the country imports more than it exports.”