People walk in Gaeseong, North Korea, July 23, 2019. The North Korean economy is estimated to have expanded at an annual rate of 4.7 percent between 1956 and 1989, the Bank of Korea reported Monday. AP

The North Korean economy is estimated to have expanded at an annual rate of 4.7 percent between 1956 and 1989, the Bank of Korea (BOK) estimated on Monday.

North Korea's economy grew at a double-digit rate up until the 1960s, but has failed to catch up to that of South Korea since then, according to the central bank.

The BOK report said the North Korean economy is believed to have expanded at an average annual rate of 13.7 percent between the 1956-1960 period.

Its growth nosedived to an average 4.1 percent in the 1961-1970 period, followed by average growth of 2.9 percent in the next decade and 2.4 percent in the 1981-1990 period.

"In the mid-1950s, the growth rates of the heavy chemical industry and the construction industry were the highest, and the proportion of mining and manufacturing industries expanded from 17 percent in 1955 to 41 percent in 1990, confirming that the North Korean economy had focused on industrialization," the report said.

"However, over-investment in the manufacturing sector led to an imbalance between industrial sectors, causing the growth of the entire economy to sharply slow down since the 1960s due to accumulated economic inefficiency," it added.

Also in terms of per capita income, North Korea's per capita income is estimated to have grown at an average rate of 1 percent a year between 1961 and 1988, marking one of the lowest rates even among former communist states.

"While South Korea's per capita income grew at a fast rate, that of North Korea stayed stagnant for a long period of time after taking a big one jump in the 1950s, and thus South Korea's per capita income is estimated to have surpassed that of North Korea in the 1960s," said the report.

The South Korean central bank used various data to first estimate annual expansion of seven major sectors, including the government, manufacturing, utilities, construction and the service industry.

It then combined the estimated figures to surmise the rate of growth for the whole economy. (Yonhap)