North Korea’s economy shrank for a third year as the pandemic continued to weigh on activity, but resurgent trade with China is raising hopes for a rebound this year even as sanctions cloud the outlook.

Gross domestic product in North Korea contracted 0.2% in the 12 months through December, shrinking to 31.4 trillion South Korean won ($24.5 billion), the central bank in Seoul estimated Friday. North Korea’s economy already shrank 0.1% in 2021 as the pandemic prompted the closure of its border with China, its biggest economic partner.

Virus outbreaks last year in the country that has shunned international offers for vaccines delivered a major blow to the economy, causing a public health crisis that threatened to overwhelm its antiquated medical system. The country has since declared victory over the virus, even though questions remain over the veracity of this claim.

It’s difficult to ascertain the true state of North Korea’s economy and society due to a dearth of reliable data. Its trade with China is one area that offers a glimpse into its economic conditions, even though the flow of goods was disrupted during the pandemic by on-and-off-again reopenings of the railroad that links the two nations.

North Korea has continued to dodge international sanctions through the ship-to-ship transfer of commodities on the high seas, often done in darkness with transponders turned off to avoid detection, a United Nations Panel of Experts on sanctions enforcement has said.

Another likely source of income is cybercrime. Both the US and South Korea have accused Kim Jong Un’s regime of deploying hackers to various corners of the world to fund its weapons programs.

On top of this, the US has accused North Korea of supplying munitions to Russia to help in the Kremlin’s full-scale invasion of Ukraine. North Korea has denied the accusation but if sales took place, they could add a jolt of cash to the economy.

Kim has shown no signs of returning to dormant nuclear disarmament talks and has been firing off ballistic missiles at a blazing pace, in defiance of UN resolutions barring him from the launches.

Washington is separately seeking the release of a US soldier who crossed into North Korea on foot earlier this month. The two countries have no direct diplomatic ties.

Below are further details from the Bank of Korea, which bases its calculations on data obtained from a number of South Korean agencies:

• North Korea’s exports more than doubled in 2022 to $1.6 billion, the Bank of Korea said. Almost all of North Korean exports are destined for China.
• Per capita income in North Korea was estimated at 1.4 million won ($1,113) in 2022, or about 3.4% that of South Korea, the BOK said.
• Mining — a key source of income spanning iron ore, minerals and other resources — expanded 4.6% while manufacturing contracted as much.
• The agricultural and fisheries industry shrank 2.1% last year, while service businesses expanded 1%.