Page last updated on June 9, 2014

Economy - overview:
The Faroese economy is dependent on fishing, which makes the economy vulnerable to price fluctuations. The sector normally accounts for about 95% of exports and nearly half of GDP. In early 2008 the Faroese economy began to slow as a result of smaller catches and historically high oil prices. The slowdown in the Faroese economy followed a strong performance since the mid-1990s with annual growth rates averaging close to 6%, mostly a result of increased fish landings and salmon farming, and high export prices. Unemployment reached its lowest level in June 2008 at 1.1% but gradually increased to about 5.5% in 2012. The Faroese Home Rule Government produced increasing budget surpluses in that period, which helped to reduce the large public debt, most of it to Denmark. However, total dependence on fishing and salmon farming make the Faroese economy vulnerable to fluctuations in world demand. Initial discoveries of oil in the Faroese area give hope for eventual oil production, which may provide a foundation for a more diversified economy and less dependence on Danish economic assistance. Aided by an annual subsidy from Denmark amounting to about 3% of Faroese GDP, the Faroese have a standard of living almost equal to that of Denmark and Greenland. The Faroese Government ran relatively large deficits from 2008 to 2010 and budget deficits are forecast for several years ahead. At year-end 2010 gross external debt had reached approximately US$900 million.

GDP (purchasing power parity):
$1.471 billion (2010 est.)
country comparison to the world: 197
$1.389 billion (2008 est.)
[see also: GDP country ranks ]

GDP (official exchange rate):
$2.32 billion (2010 est.)
[see also: GDP (official exchange rate) country ranks ]

GDP - real growth rate:
2.9% (2010 est.)
country comparison to the world: 122
0.5% (2008 est.)
[see also: GDP - real growth rate country ranks ]

GDP - per capita (PPP):
$30,500 (2008 est.)
country comparison to the world: 45
[see also: GDP - per capita country ranks ]

GDP - composition, by sector of origin:
agriculture: 16%
industry: 29%
services: 55% (2007 est.)

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

Industries:
fishing, fish processing, small ship repair and refurbishment, handicrafts

Industrial production growth rate:
3.4% (2009 est.)
country comparison to the world: 88
[see also: Industrial production growth rate country ranks ]

Labor force:
34,710 (November 2010)
country comparison to the world: 203
[see also: Labor force country ranks ]

Labor force - by occupation:
agriculture: 10.7%
industry: 18.9%
services: 70.3% (November 2010)

Unemployment rate:
6.8% (2011)
country comparison to the world: 71
5.7% (2010)
[see also: Unemployment rate country ranks ]

Population below poverty line:
NA%
[see also: Population below poverty line country ranks ]

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Budget:
revenues: $1.025 billion
expenditures: $1.301 billion
note: Denmark supplies the Faroe Islands with almost one-third of their public funds (2010 est.)

Taxes and other revenues:
44.2% of GDP (2010 est.)
country comparison to the world: 22
[see also: Taxes and other revenues country ranks ]

Budget surplus (+) or deficit (-):
-11.9% of GDP (2010 est.)
country comparison to the world: 209
[see also: Budget surplus (+) or deficit (-) country ranks ]

Fiscal year:
calendar year

Inflation rate (consumer prices):
2.3% (2011)
country comparison to the world: 85
0.4% (2010)
[see also: Inflation rate (consumer prices) country ranks ]

Exports:
$824 million (2010)
country comparison to the world: 166
$767 million (2009)
[see also: Exports country ranks ]

Exports - commodities:
fish and fish products 94%, stamps, ships

Exports - partners:
Denmark 23.4%, UK 21%, Nigeria 13.4%, US 8.9%, Netherlands 8.4%, Russia 7%, China 4.4% (2012)

Imports:
$776 million (2010)
country comparison to the world: 186
$786 million (2009)
[see also: Imports country ranks ]

Imports - commodities:
goods for household consumption 24%, machinery and transport equipment 23.5%, fuels 21.4%, raw materials and semi-manufactures, salt

Imports - partners:
Denmark 42%, Norway 32%, Germany 8.7%, Iceland 5.3% (2012)

Debt - external:
$888.8 million (2010)
country comparison to the world: 163
$68.1 million (2006)
[see also: Debt - external country ranks ]

Exchange rates:
Danish kroner (DKK) per US dollar -
5.695 (2011)
5.6241 (2011 est.)
5.6241 (2010 est.)
5.361 (2009)
5.0236 (2008)