Micronesia, Federated States of Economy 2001

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

NOTE: The information regarding Micronesia, Federated States of on this page is re-published from the 2001 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Micronesia, Federated States of Economy 2001 information contained here. All suggestions for corrections of any errors about Micronesia, Federated States of Economy 2001 should be addressed to the CIA.