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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. Experts suspect that North Korea’s 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 has contracted each year from 2020 to 2022. Its gross domestic product (GDP) in 2021 was 12% lower than in 2016. These economic troubles, coupled with food shortages, are considered the worst since Kim Jong Un assumed power in late 2011. However, there are no signs of a famine or major public unrest that could threaten the regime’s hold on its population.

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

The NIS has revealed that North Korea has been covertly exporting prohibited goods, including coal and gold, in violation of UN sanctions. In the first half of 2022, the country exported an estimated 1.7 million tons of coal, a 300% increase from the previous year. It also exported 580 kilograms (1,280 pounds) of gold, up by 50%. Additionally, the NIS estimates that North Korea has stolen over .5 billion in virtual assets since 2015.

The intelligence service warns that North Korea is expected to resume weapons testing in response to major US-South Korean military exercises and an upcoming trilateral summit with Japan at Camp David. Unusually heavy activities have been detected at a facility involved in producing solid-fueled intercontinental ballistic missiles (ICBMs). Another site related to liquid-fueled ICBMs has also shown increased activity.

Furthermore, North Korea may attempt to launch a spy satellite in late August or early September to commemorate the 75th anniversary of the country’s founding. The preparations for these launches are seen as a protest against the Camp David summit and the US-South Korean military drills.

It is evident that North Korea is sensitive to efforts by the US to strengthen its alliances with South Korea and Japan. The country has conducted more than 100 missile tests since the start of 2022, aiming to enhance its military capabilities and respond to the US-South Korean exercises. While its intercontinental ballistic missiles have the potential to reach the US mainland, there are still technological challenges to overcome. Additionally, North Korea’s shorter-range missiles pose a threat to South Korea and Japan.

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