National economy of Faroe Islands - industries, GDP and prosperity level

Since 1994, the economy of the Faroe Islands has begun to show a gradual development. The problem of unemployment is disappearing, new sectors of industry are opening up, and there are even signs of a shortage of labor. This is all regardless of the fact that in the early nineties the economy of the Faroe Islands suffered a complete collapse. Experts believe that the Faroese could achieve such an economic panorama due to the proper allocation of funds and the achievement of a budget surplus. Thus, the autonomous islands were able to reduce their external debt to the Danish Kingdom and strengthen the economic situation within their country. The main area of activity in the Faroe Islands is fishing. To date, over 350 units of large and medium-sized ships operate on the territory of the country. Approximately one hundred of them belong to the merchant fleet, which makes a fairly large contribution to the country’s GDP.

Each year, no less than 1,400,000 tons of fish and different sea products are caught. The cost of such a catch exceeds 1.5 billion Kronur. A significant contribution to the economy is also made by licenses for foreign companies that catch seafood products and fish in the territorial waters of the Faroe Islands. To date, at least 2,500 locals are engaged in fishing, and about the same number of people are involved in the processing of fish products. They account for about 30% of the total number of able-bodied population. Therefore, the role of fishing in the development of the economy and maintaining a decent standard of living in the Faroe Islands is very difficult to overemphasize. It is worth noting that they keep driving black dolphins in coastal waters of islands in order to kill them with harpoons. Despite the fact that modern organizations of animal rights advocates are against this, it is a traditional way to provide meat on the islands to the local population.

The next most important industry in the Faroe Islands is the service industry; in this case we are talking about the banking sector, insurance, transport, tourism and so on. In total, this sector employs more than 60% of the local population, which amounts to about 16,000 people. One of the most significant areas of this sector is shipbuilding and ship repair factories. There is a well-run mining industry here. Since the middle of the last century, cryolite has been extracted on the islands, and despite the fact that the deposits were close to depletion, their extraction is still being carried out. There are also huge reserves of lead-zinc ores, as well as zinc concentrates on the territory of the islands, which are actively used in industry and communal services. In general, the territory of the island is very rich in various minerals, but the government has not yet established a full-fledged development of each of them. Copyright www.orangesmile.com

In recent years, active research work on the availability of oil and gas has been conducted on the coastal shelves. It is worth noting that the Faroe Islands have received official permission from Denmark to conduct such activities, and if their attempts are successful, then the islands will be able to invest all the profits only in its budget. To date, dozens of licenses have been sold to foreign companies that are developing the territories, although this has not yet yielded positive results. The main products that are exported are fish and seafood (they account for more than 95% of export products). The country earns well on the manufacture of stamps and ships. The main exporters are Great Britain and Denmark, as well as some countries of the European Union.

Export brings about 80 million dollars in revenue. There is some imbalance between the indicators of exports and imports, as the country spends $150 million on the latter. The main imported products are mass consumption goods, semi-finished products, engineering products, fuel, salt and some food products. The main importers are Denmark, Germany, and Norway. Also in the past 10 years, the islands have established trade relations with China. To date, the national debt of the country is 62 million dollars. The nominal GDP is about 2.4 billion dollars. Stable GDP growth exceeds 2%. GDP per capita as of last year is about 47,000 dollars. Inflation is 6%. The unemployment rate as of April last year is 1.3%.