Economy in Faroe Islands

Economy—overview: The Faroese economy in 1995 and 1996 saw a noticeable upturn after several years of decline brought on by a drop in fish catches and declining prices and by over-spending by the Faroese Home Rule Government (FHRG). In the early 1990s property values plummeted and the FHRG had to bail out and merge the two largest Faroese banks. Fishing is now improving; wage costs are increasing; the FHRG's budget is almost in balance; and the large foreign debt has come down significantly. Nevertheless the total dependence on fishing makes the Faroese economy extremely vulnerable and the reduction in the foreign debt is at the cost of low investment. Oil finds close to the Faroese area give hope for deposits in the immediate Faroese area which may lay the basis for an eventual economic rebound. The Faroese are supported by a substantial annual subsidy from Denmark.

GDP: purchasing power parity—$800 million (1996 est.)

GDP—real growth rate: 6% (1996 est.)

GDP—per capita: purchasing power parity—$16 300 (1996 est.)

GDP—composition by sector:

agriculture: 20%

industry: 16%

services: 64% (1996 est.)

Inflation rate—consumer price index: 2.8% (1996 est.)

Labor force:

total: 20 345 (1995 est.)

by occupation: largely engaged in fishing manufacturing transportation and commerce

Unemployment rate: 11% (1996 est.)

Budget:

revenues: $467 million

expenditures: $468 million including capital expenditures of $11 million (1996 est.)

Industries: fishing shipbuilding construction handicrafts

Industrial production growth rate: NA%

Electricity—capacity: 91 000 kW (1995)

Electricity—production: 200 million kWh (1995)

Electricity—consumption per capita: 4 092 kWh (1995)

Agriculture—products: milk potatoes vegetables; sheep; salmon farming; fish

Exports:

total value: $362 million (f.o.b. 1995)

commodities: fish and fish products 92% animal feedstuffs transport equipment (ships)

partners: Denmark 22.2% UK 25.8% Germany 9.7% France 8.3% Norway 6.2% US 2.0%

Imports:

total value: $315.6 (c.i.f. 1995)

commodities: machinery and transport equipment 17.0% consumer goods 33% raw materials and semi-manufactures 26.9% fuels 11.4% fish and salt 6.7%

partners: Denmark 34.5% Norway 15.9% UK 8.4% Germany 7.8% Sweden 5.8% US 1.5%

Debt—external: $767 million (1995 est.)

Economic aid: receives an annual subsidy from Denmark of about $150 million (1995)

Currency: 1 Danish krone (DKr) = 100 oere

Exchange rates: Danish kroner (DKr) per US$1—6.916 (January 1998) 6.604 (1997) 5.799 (1966) 5.602 (1995) 6.361 (1994) 6.484 (1993)

Fiscal year: calendar year