Short facts about the economy in Micronesia

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

Source: World Factbook