Economy of the Faroe Islands

Infobox Economy
country = Faroe Islands


width =
caption =
currency = Faroese króna (pegged with Danish krone, (DKK))
year = calendar year
organs = none
rank = 175th
gdp = $2 billion (2006 est.)
growth = 10% (2001 est.)
per capita = $41,000 (2006 est.)
sectors = agriculture: 27%, industry: 11%, services: 62% (1999)
inflation = 1.8% (2005)
poverty = no data
labor = 25,825 (March 2008)
occupations = agriculture: 33%, industry: 33%, services: 34%
unemployment = 1,3% (April 2008)
industries = fishing, fish processing, small ship repair and refurbishment, handicrafts
exports = $774 million f.o.b. (2006 est.)
export-goods = fish and fish products 94%, stamps, ships (1999)
export-partners = UK 24%, Denmark 12.8%, Spain 8.8%, France 7.4%, Germany 5.3% (2007)
imports = $936 million c.i.f. (2006 est.)
import-goods = consumer goods 36%, raw materials and semi-manufactures 32%, machinery and transport equipment 29%, fuels, fish, salt (1999)
import-partners = Denmark 29.9%, Norway 18.5%, Germany 7.9%, Sweden 6.6%, UK 4.6%, China 3.6% (2007)
debt = $64 million (1999)
revenue = $588 million (2005)
expenses = $623 million (2005)
aid = "recipient": $100 million (annual subsidy from Denmark) (2007)
cianame = fo

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. Also important are the annual subsidy from Denmark, which amounts to about 10% of GDP.

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.

Other statistics

Electricity - production:186 GWh (1998)

Electricity - production by source:
"fossil fuel:"53.76%
"hydro:"45.7%
"nuclear:"0%
"other:"0.54% (1998)

Electricity - consumption:173 GWh (1998)

Electricity - exports:0 kWh (1998)

Electricity - imports:0 kWh (1998)

Agriculture - products:
milk, potatoes, vegetables; sheep; salmon, other fish

Currency:1 Danish krone (DKr) = 100 oere

Exchange rates:Danish kroner (DKr) per US$1 - 7.336 (January 2000), 6.976 (1999), 6.701 (1998), 6.604 (1997), 5.799 (1996), 5.602 (1995)

Further reading

* Apostle, Richard A. "The Restructuration of the Faroese Economy The Significance of the Inner Periphery". Frederiksberg, Denmark: Samfundslitteratur, 2002. ISBN 8759308915
* Elkjær-Hansen, Niels. "The Faroe Islands Scenery, Culture, and Economy". Copenhagen: Royal Danish Ministry of Foreign Affairs, 1959.
* [http://www.hagstova.fo/portal/page/portal/SHARED/HAGSTOVA_MAIN_TEMPLATE/Faroe%20Islands%20in%20figures%202008.pdf Hagstova.fo]