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North Korea has been suffering from chronic economic hardships and food shortages, which have been 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. There are suspicions that North Korea’s weapons programs are 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, 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 most severe since Kim Jong Un assumed power in 2011. However, there are no signs of a famine or major public unrest that could threaten Kim’s regime.

The government’s attempts to restrict market activities, dwindling personal incomes, and pandemic-related trade restrictions have further aggravated the food problem. The NIS revealed that North Korea covertly exported 1.7 million tons of coal and 580 kilograms of gold, both in violation of UN sanctions. It is also estimated that North Korea has stolen over .5 billion in virtual assets since 2015.

The NIS also expressed concern that Kim Jong Un may resume weapons testing in response to the annual US-South Korean military drills and an upcoming trilateral summit between the US, South Korea, and Japan. Unusually heavy activities have been detected at a facility producing solid-fueled intercontinental ballistic missiles (ICBM) and another site related to liquid-fueled ICBMs.

Furthermore, North Korea may attempt to launch a spy satellite in late August or early September to commemorate the country’s 75th anniversary. The regime has been testing an engine for the rocket and has installed an additional land antenna for satellite data reception.

North Korea’s missile testing is seen as a response to US efforts to strengthen alliances with South Korea and Japan. Since the beginning of 2022, the country has conducted over 100 missile tests to enhance its military capabilities. While it has demonstrated the potential range of its ICBMs to reach the US mainland, analysts believe that it still needs to overcome technological challenges. Meanwhile, its shorter-range missiles pose a threat to South Korea and Japan.

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