North Korea's economy grows at slower pace this year: Report

SEOUL (REUTERS) - North Korea's closed economy rose last year at a slightly slower pace compared to 2013, South Korea's central bank data showed on Friday, even as the United Nations toughened sanctions for its nuclear and missile programmes.

Trade in the impoverished country, under the iron rule of the Kim family for more than 60 years, stood at an all-time high since records were first kept in 1990. North Korea does not release economic data. The Bank of Korea across the border is the only official government entity that provides estimates about the economic performance of the North.

Despite the expanded output, North Korea's economy and trade was just a fraction of industrial powerhouse South Korea, with a continued heavy reliance on China, its main benefactor. The slower pace of growth also dimmed a high-profile policy of leader Kim Jong Un to bring prosperity and higher standard of living for its people with a massive construction drive.

North Korea is heavily sanctioned under UN resolutions for its nuclear and missile tests dating back to 2006, and its ties with South Korea have been cut back sharply after Seoul suspended most commercial projects and aide since 2010. The Security Council's sanctions on Pyongyang target the country's missile and nuclear programmes and attempt to punish North Korea's reclusive leadership through a ban on the export of luxury goods to the country. North Korea has conducted several nuclear and long range missile tests.

The Bank of Korea said in a statement that the secretive state's gross domestic product rose 1.1 per cent in 2013, compared to an annual 1.3 per cent incline in 2012, led by agricultural growth thanks to favourable weather conditions last year.

In broad terms, all major sectors posted positive growth in North Korea in 2013 on-year with the exception of construction. Residential construction grew but it was offset by the fall in road pavement projects, the Bank of Korea said.

The industrial production sector, which has the heaviest share in North Korea's GDP index grew 1.5 per cent, slightly faster than a 1.3 per cent growth posted in 2012. Farm production grew 1.9 per cent on an annual basis last year, slowing down for a second consecutive year.

Trade in North Korea last year stood at a record high of US$7.3 billion (S$9.14 billion) worth, exporting US$3.2 billion and importing US$4.1 billion. A central bank official said 89.1 per cent of trade in North Korea last year was with China. The numbers dwarf in comparison with southern neighbour, one of Asia's export powerhouses, as South Korea's trade stood at US$1.1 trillion last year while exporting US$559.6 billion worth. On an annual basis, North Korean trade was up 7.8 per cent in 2013, while exports jumped 11.7 per cent.