South Korea estimates North Korea’s economy grew over 3 percent for third year

North Korea’s economy expanded by more than three percent in 2025 for the third consecutive year, according to new estimates released by South Korea’s central bank. The report suggests that stronger economic and military cooperation with Russia played a major role in boosting growth despite North Korea’s continued international isolation.

The Bank of Korea, which has published annual estimates of North Korea’s economy since 1991 because Pyongyang does not release official economic data, estimated that the country’s real gross domestic product grew by 3.5 percent last year. The report valued North Korea’s economy at approximately 38.26 trillion won, or about 26.6 billion dollars.

According to Bank of Korea officials, expanded cooperation with Russia was one of the main reasons for the improvement. Analysts have said North Korea has strengthened ties with Moscow by supplying troops and military equipment for Russia’s war in Ukraine. In return, Pyongyang is believed to have received financial assistance, food supplies, energy resources and military technology.

A Bank of Korea official said increased weapons exports to Russia supported growth in North Korea’s manufacturing sector. The official also noted that a rise in Russian tourists and improved transport links between the two countries contributed to stronger performance in construction and service industries.

The report estimated that North Korea’s exports increased by 30 percent during 2025, reaching around 470 million dollars. Among the leading export products were prepared feathers and wigs, along with toys and sporting goods. Although the report did not identify all exported items, officials said stronger overseas sales contributed significantly to economic growth.

The latest figures were released as reports continued to highlight growing military cooperation between Moscow and Pyongyang. Ukraine’s military intelligence, quoted by the Kyiv Independent, claimed that more than 7,000 North Korean troops were killed or wounded while fighting alongside Russian forces during military operations in Russia’s Kursk region between 2024 and 2025. Neither Russia nor North Korea has independently confirmed those figures.

Separately, the Ukrainian human rights organisation Truth Hounds said Russia and North Korea are close to completing their first road bridge connecting the two countries. The group said such a link could strengthen military and economic cooperation by allowing easier movement of personnel, equipment and supplies across the border.

The Bank of Korea also reported a significant increase in North Korea’s gross national income, which measures the total income earned by a country’s residents. The estimate showed GNI rising by 9.4 percent to 48.5 trillion won, or approximately 33.8 billion dollars. Officials said the increase was supported by higher foreign currency earnings, including income linked to North Korean personnel sent to Russia.

Despite the recent growth, North Korea’s economy remains extremely small compared with its southern neighbour. According to the Bank of Korea, North Korea’s gross national income is still less than two percent of South Korea’s economy, highlighting the large economic gap that continues to separate the two countries.

The latest estimates suggest that while North Korea remains under international sanctions and largely isolated from global markets, its expanding partnership with Russia is providing new sources of economic activity that have helped sustain growth for a third straight year.