The economy of Democratic People's Republic of Korea (DPRK) is a centrally planned economy.
North Korea's economy remains one of the world's last centrally planned systems. The role of market allocation is sharply limited - mainly in the rural sector where peasants sell produce from small private plots. There are almost no small businesses. Although there have been scattered and limited attempts at decentralization, as of mid-1993, P'yongyang's basic adherence to a rigid centrally planned economy continues, as does its reliance on fundamentally non-pecuniary incentives. The collapse of socialist governments around the world in 1991, particularly North Korea's principal benefactor, the Soviet Union, have forced North Korean economy to realign its foreign economic relations. Economic exchanges with South Korea have even begun in earnest. A recent attempt at creating Chinese-style Special Economic Zones is representative of North Korea's current movement towards capitalism.
The South Korean government's estimate placed North Korea's GNP in 1991 at US$22.9 billion, or US$1,038 per capita. This estimate of economic accomplishment pales next to South Korea's GNP of US$237.9 billion with a per capita income of US$5,569 that same year. North Korea's GNP in 1991 showed a 5.2 percent decline over 1989, and preliminary indications were that the decline would continue. In contrast, South Korea's GNP grew by 9.3 percent and 8.4 percent, respectively, in 1990 and 1991.