TOKYO/SEOUL (BLOOMBERG) - As informal markets and budding entrepreneurs rise to fill more of the void left by failed state-owned enterprises in North Korea, analysts outside the notoriously secretive country are finding it even more tricky to measure its economy.

That's the message from Mr Cho Tae Hyoung, the chief of the North Korea research team at South Korea's central bank in Seoul, which is considered the most authoritative source for estimates on North Korean leader Kim Jong Un's economy.

Mr Cho and his colleagues at the Bank of Korea (BOK) draw on a grab-bag of hard data, suppositions and guesswork that would bring despair to economists studying most countries.

Their best guess is that North Korea's gross domestic product contracted 3.5 per cent in 2017 to about US$32.3 billion (S$43.5 billion), making it more than 40 times smaller than the South's GDP.

Annual per capita income in North Korea is about US$1,300, according to the BOK, less than a twentieth that of the South and about half the level of Vietnam, where Mr Kim will travel later this month for a summit with United States President Donald Trump.

Figures for 2018 won't be available until mid-year but the outlook isn't encouraging, according to Mr Cho, who spoke in an interview on Feb 13. He cited the impact of sanctions that cut exports to China by about 90 per cent in 2018.

With official statistics from North Korea both scant and suspect, the BOK combs through figures compiled by South Korean government departments and its spy agency, analysis of satellite images, debriefings from defectors, reports from think tanks, Chinese trade data, and (with great caution) speeches by Mr Kim and state-media out of Pyongyang.

Satellite images indicate that more markets are popping up around the country every year, and that they are getting bigger. But the pictures don't show enough detail on everything that's being traded, in what volume and for what price. Knowing what vendors pay in rent and what they pay any staff is equally hard to discern.

"The job of estimating the North Korean economy has become more and more difficult," said Mr Cho, who concedes that the BOK in many cases doesn't know how the data it uses is originally compiled. He feels more confident about calculations for the rate of growth (or decline) in the economy than putting a number on its size.

The model the BOK uses to calculate the North's GDP is based on the one it developed for measuring South Korean GDP, and uses the so-called production approach. Ideally, Mr Cho said he would like to also apply the expenditure approach to North Korea's national accounts but there isn't enough data.

Mr Cho cautions against assuming that the modest economic development seen in the changing face of Pyongyang is replicated outside the capital, particularly in the countryside.

But he does see the rise of the services sector as a nationwide trend that's increasingly important for the economy and has come in tandem with Mr Kim's greater acceptance of market forces.