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North Korea’s economy has been severely impacted by the Covid-19 pandemic and UN sanctions, resulting in chronic economic hardships and food shortages. 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 shrunk each year from 2020 to 2022, with its gross domestic product in 2021 being 12% lower than in 2016. Independent experts believe that the current food shortages and economic troubles are the worst since Kim Jong Un took 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 worsened the food problem in North Korea. 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, both in violation of UN sanctions. The NIS also estimated that North Korea has stolen over .5 billion in virtual assets since 2015.

The NIS further stated that Kim Jong Un is expected to resume weapons testing in response to major military drills between the US, South Korea, and Japan. Unusually heavy activities have been detected at a facility that produces solid-fueled intercontinental ballistic missiles (ICBMs), as well as another site related to liquid-fueled ICBMs. North Korea may also attempt to launch a spy satellite in late August or early September to mark the country’s 75th anniversary.

It is believed that North Korea’s missile tests serve as a protest against US efforts to strengthen alliances with South Korea and Japan. Since the beginning of 2022, North Korea has conducted more than 100 missile tests to enhance its military capabilities. While its ICBMs have the potential to reach the US mainland, analysts believe that North Korea still faces technological challenges. The country’s shorter-range missiles pose a threat to South Korea and Japan. Solid-fueled missiles, in particular, are more difficult to detect before launch due to their ease of movement and quick firing capabilities.

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