A North Korean Army soldier looks at the southern side using binoculars at the border village of Panmunjom , ( DMZ ) , that separates the two Koreas since the Korean War . ( AP ) North Korea ' s actual military spending is believed to be about 15 times the announced amount in 2009 as the communist regime continues to build up its military capacity despite the country ' s moribund economy , a South Korean defense research institute said Tuesday . The North said it spent US $ 570 million on its military in 2009 , but the real expenditure , calculated on an exchange rate based on purchasing power parity terms , was $ 8 . 77 billion , the state - run Korea Institute of Defense Analyses ( KIDA ) said in a report . ' In spite of its economy shrinking since the mid - 2000 s , North Korea has gradually increased its military spending , ' the report said . North Korea maintains the world ' s fifth - largest army with an active duty military force of 1 . 19 million , compared to about 655 , 000 in the South . According to figures released by North Korea , its military spending rose to $ 570 million in 2009 from $ 540 million in 2008 , $ 510 million in 2007 and $ 470 million in 2006 , the KIDA said . As of 2009 , North Korea ' s gross national income stood at 28 . 6 trillion won ( $ 25 billion ) , compared with the South ' s 1 , 068 trillion won , the KIDA said . ( Yonhap News )