Surging inflation in North Korea has some people complaining that they need to carry a backpack full of cash just to go shopping, residents in the reclusive country told Radio Free Asia.
Despite government attempts to tightly control prices, the cost of many items on informal markets called jangmadang, which became part of the economy after the famine that hit North Korea in the 1990s, have steadily risen.
North Korean authorities initially forbid jangmadang, but they gradually allowed the markets because they provided a means for people to survive. Many women in particular have set up stalls and small businesses to earn money for their families because the salaries their state-employed husbands receive is so low.
But over the past two years, the price of eggs, sugar, pork, rice and cooking oil have jumped twofold to fivefold, according to two sources from Yanggang province.
The main reason appears to be a shortage of supplies and the depreciation of the North Korean won against the Chinese yuan and U.S. dollar, which makes goods more expensive in local currency, the sources say.
“Market prices have jumped at least twofold and, in some cases, more than fivefold,” said a Yanggang province resident who requested anonymity for security reasons. “Now, instead of carrying a money pouch to the market, people literally have to bring a backpack full of cash.”
North Korea doesn’t report consumer price data, so examples of specific products reflect the changes.
For example, a kilogram of sunflower oil, used for cooking, has nearly tripled to 75,000 won over the past two years, while sugar has jumped fourfold to 40,000 won. A kilogram of pork has more than tripled to 87,000 won.
Since 1,000-won notes are commonly used for daily transactions, buying a kilogram of sugar would require a stack of 40 such bills. Smaller bills would require even more.
North Korea is chronically short of food, and most people struggle to get food on their tables amid poor harvests and a weak economy still recovering from COVID-19 shutdowns. Every year, people starve to death, experts say.
The U.N. World Food Programme says that agriculture regularly falls short of meeting the people’s food needs due to the shortage of arable land and the lack of access to fertilizers and modern agricultural equipment.
That’s prompted some to take desperate measures. Last month, RFA reported that hungry North Korean soldiers are selling some of their military equipment to buy food.
In August 2023, RFA Korean reported that murder and other violent crimes were on the rise amid spreading hunger.
Wage hikes
Also, prices appear to have increased after the government raised wages in January 2023.
In North Korea, nearly everyone’s salaries are set by the state. In 2023, workers’ base salaries were raised from 2,000 won a month to 30,000 won.
The apparent goal of this plan was to raise wages while keeping prices stable. Authorities wanted to encourage workers to rely on their salaries for living expenses rather than engaging in side businesses or money-making activities in the jangmadang markets.
However, because of the widespread shortages of food and many other goods, the plan failed. On jangmadang markets across the country, prices have been steadily climbing, residents say.
Two years ago, before the wage hikes, a kilogram of salt cost 500 won, but now it goes for 2,000 won. A carton of eggs has risen from 800 won to 2,000 won, residents say.
Footwear is also more expensive. Before the wage hike a pair of sneakers made at the Sinuiju Shoe Factory sold for 19,800 won, but now they cost 170,000 won on the black market.
“As wages have risen, so have the prices of all other necessities, making it unclear why the government decided to raise wages in the first place,” he said. “Instead of improving people’s livelihoods, the wage increase has only made daily life even more difficult.”
A party official from Yanggang province who also requested anonymity said the price of rice has nearly doubled to 9,400 won per kilogram in the jangmadang markets.
Tobacco and cigarette prices have surged. Last March, a kilogram of “Yanggang wild tobacco” cost 400,000 won, but now it has soared to 2.5 million won.
“To buy just 1 kilogram of tobacco, you would need 500 of North Korea’s highest-denomination 5,000-won bills,” said official said.
Weaker won
Meanwhile, the domestic currency has weakened against the U.S. dollar and Chinese yuan, which are widely used in the markets — despite authorities’ attempts to restrict their use.
It has also raised the price of goods if customers pay in won.
Before the 2023 wage hike, 1 Chinese yuan bought 1,260 won and 1 U.S. dollar equaled 8,500 won on the black market. But now, a yuan is worth about 3,500 won and a dollar is worth 24,000 won.
“The North Korean currency has become so worn out that it is barely recognizable, and with prices skyrocketing, people have no choice but to use Chinese yuan,” said party official said.
Using foreign currency has even become a status symbol.
“Among young and wealthy people, a common way to show off is to say, ‘I don’t play with North Korean money,‘” the official said. “Those with financial means only use Chinese yuan or US dollars, while North Korean currency has essentially become the currency of the poor.”
Edited by Malcolm Foster.
This content originally appeared on Radio Free Asia and was authored by RFA Korean.