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Asia and Oceania
Micronesia |
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Last reviewed: 29 September 2009 |
Country information
Economy
Basic economic facts
GDP: US$- 236 million (2007)
GDP per capita: US$2,851 (2007)
Annual growth: -3.2% (2007)
Inflation: 2.8% (2007)
Unemployment: 22% (2000 est)
Population below the poverty line: 26.7% (2000)
Major industries: tourism, construction; fishing and processing; specialised aquaculture; craft items from shell, wood and pearls.
Major trading partners: Japan, United States, New Zealand, Australia, Guam, Hong Kong
Exchange rate: Uses US dollar
Micronesia’s economy is import based. Economic activity consists primarily of subsistence farming and fishing. The islands have few mineral deposits worth exploiting, except some high-grade phosphate. The potential for a tourist industry exists, but the remoteness of the location, lack of adequate facilities and limited air connections hinder development. Fishing is also a revenue source, from foreign licence fees and increasingly from domestic operation. However, financial assistance from the US is the primary source of revenue and the Amended Compact of Free Association with the US guarantees Micronesia millions of dollars in annual aid until 2023. Thereafter a Trust Fund is established into which the United States and Micronesia make annual contributions in order to provide annual payouts to Micronesia in perpetuity after 2023. The country’s medium term economic outlook appears fragile due not only to the reduction in US assistance but also to the slowdown of the private sector.
