The pneumonia in Wuhan (new coronavirus disease, COVID-19) is ravaging the world, and some experts say that North Korea’s financial situation has deteriorated sharply due to the severe impact of the Epidemic, so it is necessary to adjust the tone of the control-based policy. North Korea is faced with the dilemma of “loosening the underground economy” and “tightening the belt of the main economy”.
According to the Yonhap News Agency, Lee Jong-kyu, a senior researcher at the South Korea Development Institute (KDI), published a report titled “North Korea’s Fiscal Shock, How the Economy is Affected” in the KDI North Korea Economic Review on the 29th, analyzing North Korea’s budget and revenue plans for this year and its recent policy features. The report points out that North Korea has taken unprecedentedly strict measures to close the country to prevent and control the epidemic, and trade has been drastically reduced, resulting in a significant reduction of tax sources such as value-added tax and corporate tax.
The report mentioned that North Korea has set its “budget revenue increase” target at 0.9 percent this year, the first Time the target is below 1 percent, a new low during Kim Jong-un’s tenure, and the “fiscal expenditure” target at 1.1 percent, the first time since Kim Jong-un took office that the target is below 2 percent. Lee Jong-gyu said that the only option left for North Korea is the underground economy, so it is necessary to adjust the tone of the policy based on control, and North Korea faces the dilemma of either “loosening the underground economy” or “tightening the belt of the main economic body”.
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