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KDI - Korea Development Institute

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North Korea Economy KDI Review of the North Korean Economy, March 2025 March 27, 2025

North Korea Economy

Monthly published paper on the current status of the North Korean Economy and major
issues on inter-Korean economic cooperation assisting academia, policy makers and corporate sectors to better understand North Korea

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LanguageKOR
KDI Review of the North Korean Economy, March 2025
March. 27. 2025
Summary
The March issue examines North Korea’s military buildup and South Korea’s strategic responses. North Korea’s intervention in the Russia-Ukraine war in October 2024 marked a calculated effort to address domestic challenges, further deepening RussiaNorth Korea military ties. The Kim Jong-un regime has officially designated South Korea a “hostile belligerent state” and, through the 8th Party Congress, outlined a five-year defense development plan (20212025) aimed at advancing nuclear capabilities, developing tactical weapons, and enhancing reconnaissance. Since 2023, intensified military cooperation with Russia has accelerated North Korea’s conventional force modernization, including the development of eight types of tactical nuclear weapons and upgrades across all service branches. The linkage between its “anti-enemy struggle” doctrine and defense modernization reveals the regime’s broader military strategy. In response, South Korea’s 2025 defense budget prioritizes strengthening its three-axis defense system, launching a Strategic Command, and advancing AI-based combat systems. However, the defense sector has been slower than private industry to incorporate Fourth Industrial Revolution technologies, highlighting the need to leverage civilian innovations and broaden partnerships to enhance military capabilities.
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