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North Korea has been facing chronic economic hardships and food shortages, which have been further worsened by the Covid-19 pandemic and UN sanctions. Despite these difficulties, the country has conducted a record number of missile tests since last year, leading to suspicions that its weapons programs are funded by 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. In fact, its gross domestic product in 2021 was 12% lower than in 2016. Experts believe that the current food shortages and economic troubles are the worst since leader Kim Jong Un came into power in late 2011. However, there are no signs of a major famine or public unrest that could threaten Kim Jong Un’s hold on power.

The government’s attempts to restrict market activities, dwindling personal incomes, and pandemic-related trade restrictions have aggravated the food shortage in North Korea. The NIS revealed that in the first half of this year, North Korea covertly exported approximately 1.7 million tons of coal, a 300% increase from the previous year, and 580 kilograms (1,280 pounds) of gold, a 50% increase, both in violation of UN sanctions. Additionally, the NIS estimated that North Korea has stolen over .5 billion in virtual assets since 2015.

The intelligence service also reported that Kim Jong Un is expected to resume weapons testing in response to major annual US-South Korean military drills and a trilateral US-South Korea-Japan summit. Unusually heavy activities have been detected at a facility that produces solid-fueled intercontinental ballistic missiles (ICBM). North Korea may also attempt to launch a spy satellite in late August or early September to commemorate the 75th anniversary of the country’s founding. The NIS stated that North Korea has been testing an engine for the rocket intended for the satellite launch.

North Korea remains sensitive to US efforts to strengthen alliances with South Korea and Japan and has conducted over 100 missile tests since the start of 2022. While the country has demonstrated potential to reach the US mainland with its ICBMs, there are still technological challenges to overcome. Nonetheless, its shorter-range missiles pose a threat to South Korea and Japan. North Korea’s use of solid-fuelled missiles makes detection and response more difficult due to their mobility and quick launch capabilities.

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