North Korea has announced plans to increase its national budget by over 5% compared to last year. This marks a significant shift from recent years when budget increases were limited to 1-3%. Experts believe this move signals an intention to boost spending in both economic and defense sectors.
The state-run newspaper Rodong Sinmun reported on Tuesday that the first session of the 15th Supreme People’s Assembly has decided to raise national budget expenditure to 105.8% of the previous year’s level.
North Korea’s Annual Budget Growth Remained Around 1% From 2021 to 2023, With Modest Increases of 3.4% in 2024 and 3.8% in 2025
A substantial portion of the increased budget is expected to be directed towards economic growth. Rodong Sinmun stated that 43.8% of the total budget has been allocated to expand funding for socialist economic construction to 105.5% of last year’s level, describing it as a measure to promote stable and sustainable development across the economy. However, North Korea has not disclosed specific figures for the total budget.
Since 2024, North Korea has been implementing its Local Development 20X10 Policy, aiming to construct modernized factories in 20 regions over a decade to stimulate local economic growth. The country has also been building new housing nationwide, including in Pyongyang, since 2021. The significant budget increase this year is likely intended to continue these initiatives.
Additionally, policies aimed at strengthening national defense are expected to maintain their current trajectory.
Rodong Sinmun reported that defense spending accounts for 15.8% of the total budget, stating that this allocation will be used to continuously expand and strengthen our self-reliant nuclear deterrence and war-fighting capabilities.
In recent years, defense spending has consistently comprised about 15% of the budget, with figures of 15.7% last year, 15.9% in 2024, and 15.9% in 2023. However, given the notable increase in this year’s overall budget, analysts anticipate a larger boost in defense spending compared to previous years. Some experts note that portions of the defense budget may be executed through entities like the Second Economic Committee, which operates independently from the civilian economy, making it challenging for outside observers to accurately assess the total scale of military expenditures.
