The Korean Journal of Economic Studies
Market Prices in North Korea: 2006~2022
Song Lim (Bank of Korea) and SeungHyun Moon (Seoul National University(Year 2024Vol. 72No. 1
This paper reanalyzes the cost of living in North Korea, which has been discussed mainly concerning rice prices, through the price index. The analysis results show that North Korea’s market price fluctuations are a monetary phenomenon caused by changes in liquidity in the long term, and in the short term they are affected by internal and external environmental changes, such as natural disasters, failure of currency reform, strengthened international sanctions against North Korea, and the COVID-19 pandemic. During the period from 2006 to 2012, the currency over issuance for the purpose of making up for the fiscal deficit acted as a dominant factor in the rise in prices. After 2013, prices fluctuated mainly due to the supply and demand situation in the real sector, while North Korean authorities restricted any increase in liquidity. Since 2016, international sanctions against North Korea have been strengthened, and imports from China have plummeted to an unprecedented level due to the 2020 COVID-19 pandemic. As a result, prices rose mainly for imported foodstuffs and medicines. On the other hand, since 2013, when prices began to stabilize, a phenomenon in which rice prices have moved in a different direction from prices has been observed. It means that the rice price trend since 2013 does not explain the change in prices.