Faroe Islands Economy Profile 2002

Economy - overview

The Faroese economy has had a strong performance since 1994, mostly as a result of increasing fish landings and high and stable export prices. Unemployment is falling and there are signs of labor shortages in several sectors. The positive economic development has helped the Faroese Home Rule Government produce increasing budget surpluses which in turn help to reduce the large public debt, most of it owed to Denmark. However, the total dependence on fishing makes the Faroese economy extremely vulnerable, and the present fishing efforts appear in excess of what is a sustainable level of fishing in the long term. Oil finds close to the Faroese area give hope for deposits in the immediate Faroese area, which may eventually lay the basis for a more diversified economy and thus lessen dependence on Denmark and Danish economic assistance. Aided by a substantial annual subsidy (15% of GDP) from Denmark, the Faroese have a standard of living not far below the Danes and other Scandinavians.

GDP (purchasing power parity)

purchasing power parity - $910 million (2000 est.)

GDP - real growth rate

5% (2000 est.)

GDP - per capita (PPP)

purchasing power parity - $20,000 (2000 est.)

GDP - composition by sector

agriculture: 27%
industry: 11%
services: 62% (1999)

Population below poverty line

NA%

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

5.1% (1999)

Labor force

24,250 (October 2000 )

Labor force - by occupation

fishing, fish processing, and manufacturing 33%, construction and private services 33%, public services 34%

Unemployment rate

1% (October 2000 )

Budget

revenues: $488 million
expenditures: $484 million, including capital expenditures of $21 million (1999)

Industries

fishing, fish processing, shipbuilding, construction, handicrafts

Industrial production growth rate

8% (1999 est.)

Electricity - production

165 million kWh (2000)

Electricity - production by source

fossil fuel: 61%
hydro: 39%
nuclear: 0%
other: 0% (2000)

Electricity - consumption

153.45 million kWh (2000)

Electricity - exports

0 kWh (2000)

Electricity - imports

0 kWh (2000)

Agriculture - products

milk, potatoes, vegetables; sheep; salmon, other fish

Exports

$471 million f.o.b. (1999)

Exports - commodities

fish and fish products 94%, stamps, ships (1999)

Exports - partners

Denmark 32%, UK 21%, France 9%, Germany 7%, Iceland 5%, US 5% (1996)

Imports

$469 million c.i.f. (1999)

Imports - commodities

machinery and transport equipment 29%, consumer goods 36%, raw materials and semi-manufactures 32%, fuels, fish and salt (1999)

Imports - partners

Denmark 28%, Norway 26%, Germany 7%, UK 6% Sweden 5%, Iceland 4%, US (1999)

Debt - external

$64 million (1999)

Economic aid - recipient

$135 million (annual subsidy from Denmark) (1999)

Currency

Danish krone (DKK)

Currency (code)

DKK

Exchange rates

Danish kroner per US dollar - 8.418 (January 2002), 8.323 (2001), 8.083 (2000), 6.976 (1999), 6.701 (1998), 6.604 (1997)

Fiscal year

calendar year