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North Korea is facing severe economic hardships and food shortages, exacerbated by the Covid-19 pandemic and UN sanctions. Despite these challenges, the country has conducted a record number of missile tests since last year, raising suspicions that its weapons programs are being funded through illegal cyber activities and covert exports of banned items.

According to the National Intelligence Service (NIS), North Korea’s economy contracted each year from 2020 to 2022, with its gross domestic product in 2021 being 12% lower than in 2016. Experts believe that the current food shortages and economic troubles are the worst since Kim Jong Un assumed power in 2011, but there is no sign of an imminent famine or major public unrest that could threaten his regime.

The government’s attempts to restrict market activities, dwindling personal incomes, and pandemic-related trade restrictions have further aggravated the food problem, as reported by North Korea monitoring groups.

The NIS revealed that in the first half of this year, North Korea covertly exported around 1.7 million tons of coal, a 300% increase from the previous year, and 580 kilograms of gold, a 50% increase, in violation of UN sanctions. It is estimated that North Korea has stolen more than .5 billion in virtual assets since 2015.

The intelligence service also warned that Kim Jong Un is expected to resume weapons testing in response to major US-South Korean military drills and an upcoming trilateral summit with the US, South Korea, and Japan.

Recent satellite imagery showed increased activities at a North Korean facility producing intercontinental ballistic missiles (ICBMs). The NIS also mentioned the possibility of North Korea attempting to launch a spy satellite in late August or early September to commemorate the country’s founding anniversary.

While North Korea has demonstrated the potential range of its ICBMs to reach the US mainland, analysts believe there are still technological challenges to overcome. The country’s shorter-range missiles pose a threat to South Korea and Japan.

North Korea’s missile tests and military activities are seen as a response to perceived threats from the US and its allies, highlighting the sensitivity the country has towards efforts to strengthen alliances in the region.

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