Economy of the Faroe Islands

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Economy of Faroe Islands
Currency	Faroese króna (pegged with Danish krone, (DKK))
Fiscal year	calendar year
Trade organisations	none
Statistics
GDP (PPP)	$1 billion (2001 est.) (194th [1])
GDP growth	10% (2001 est.)
GDP per capita	$22,000 (2001 est.)
GDP by sector	agriculture: 27%, industry: 11%, services: 62% (1999)
Inflation (CPI)	5.1% (1999)
Pop below poverty line	no data
Labour force	24,250 (October 2000)
Labour force by occupation	agriculture: 33%, industry: 33%, services: 34%
Unemployment	1% (October 2000)
Main industries	fishing, fish processing, small ship repair and refurbishment, handicrafts
Trading Partners
Exports	$533 million f.o.b. (2004 est.)
Export goods	fish and fish products 94%, stamps, ships (1999)
Main partners	Denmark 38%, UK 29.4%, Nigeria 8.9%, Norway 6.6%, Netherlands 4.3% (2005)
Imports	$639 million c.i.f. (2004 est.)
Imports goods	consumer goods 36%, raw materials and semi-manufactures 32%, machinery and transport equipment 29%, fuels, fish, salt (1999)
Main Partners	Denmark 46.2%, Norway 18.1%, Germany 8.2%, Spain 7.6%, Iceland 4.8% (2005)
Public finances
Public debt	$64 million (1999)
Revenues	$488 million
Expenses	$484 million; including capital expenditures of $21 million (1999)
Economic aid	recipient: $135 million (annual subsidy from Denmark) (1998)
Main source [2] All values, unless otherwise stated, are in US dollars

After the severe economic troubles of the early 1990s, brought on by a drop in the vital fish catch and poor management of the economy, the Faroe Islands have come back in the last few years, with unemployment down to 5% in mid-1998. In 2006 unemployment declined to 3%, one of the lowest rates in Europe. Nevertheless, the almost total dependence on fishing means the economy remains extremely vulnerable. The Faroese hope to broaden their economical base by building new fish-processing plants. Petroleum found close to the Faroese area gives hope for deposits in the immediate area, which may lay the basis to sustained economic prosperity.

Since 2000, new information technology and business projects have been fostered in the Faroe Islands to attract new investment. The result from these projects is not yet known but is hoped to bring a better market economy to the Faroe Islands.

The Faroes have one of the lowest unemployment rates in Europe, but this is not necessarily a sign of a recovering economy, as many young students move to Denmark and other countries once they are finished with high school. This leaves a largely middle-aged and elderly population that may lack the skills and knowledge to take IT positions on the Faroes.