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Micronesia Economy




Micronesia, Federated States of    Economy Top of Page
Economy - overview: Economic activity consists primarily of subsistence farming and fishing. The islands have few mineral deposits worth exploiting, except for high-grade phosphate. The potential for a tourist industry exists, but the remoteness of the location and a lack of adequate facilities hinder development. In 1996, the country experienced a 20% reduction in revenues from the Compact of Free Association - the agreement between the US and Micronesia in which Micronesia receives $1.3 billion in financial and technical assistance over a 15-year period until 2001 - as a result of the second step-down under the agreement. Since these revenues accounted for 57% of consolidated government revenues, reduced Compact funding resulted in a severe depression. While Micronesia's economy appears to have bottomed out in 1999, the country's medium-term economic outlook remains fragile due to likely further reductions in external grants made under the US Compact funding. Geographical isolation and a poorly developed infrastructure remain major impediments to long-term growth.
GDP: purchasing power parity - $263 million (1999 est.)

note:  GDP is supplemented by grant aid, averaging perhaps $100 million annually
GDP - real growth rate: 0.3% (1999 est.)
GDP - per capita: purchasing power parity - $2,000 (1999 est.)
GDP - composition by sector: agriculture:  19%

industry:  4%

services:  77% (1996 est.)
Population below poverty line: NA%
Household income or consumption by percentage share: lowest 10%:  NA%

highest 10%:  NA%
Inflation rate (consumer prices): 2.6% (FY98/99)
Labor force: NA
Labor force - by occupation: two-thirds are government employees
Unemployment rate: 16% (1999 est.)
Budget: revenues:  $161 million ($69 million less grants)

expenditures:  $160 million, including capital expenditures of $NA (1998 est.)
Industries: tourism, construction, fish processing, craft items from shell, wood, and pearls
Industrial production growth rate: NA%
Electricity - production: NA kWh
Electricity - production by source: fossil fuel:  NA%

hydro:  NA%

nuclear:  NA%

other:  NA%
Electricity - consumption: NA kWh
Agriculture - products: black pepper, tropical fruits and vegetables, coconuts, cassava (tapioca), sweet potatoes; pigs, chickens
Exports: $73 million (f.o.b., 1996 est.)
Exports - commodities: fish, garments, bananas, black pepper
Exports - partners: Japan, US, Guam
Imports: $168 million (c.i.f., 1996 est.)
Imports - commodities: food, manufactured goods, machinery and equipment, beverages
Imports - partners: US, Japan, Australia
Debt - external: $111 million (1997 est.)
Economic aid - recipient: under terms of the Compact of Free Association, the US will provide $1.3 billion in grant aid during the period 1986-2001
Currency: US dollar (USD)
Currency code: USD
Exchange rates: the US dollar is used
Fiscal year: 1 October - 30 September

 

Countryfacts Information Courtesy: CIA Worldbook








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