Micronesia, Federated States of Economy - 2005

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 remote location, a lack of adequate facilities, and limited air connections hinder development. The Amended Compact of Free Association with the US guarantees the Federated States of Micronesia (FSM) millions of dollars in annual aid through 2023, and establishes a Trust Fund into which the US and the FSM make annual contributions in order to provide annual payouts to the FSM in perpetuity after 2023. The country's medium-term economic outlook appears fragile due not only to the reduction in US assistance but also to the slow growth of the private sector. Geographical isolation and a poorly developed infrastructure remain major impediments to long-term growth.

GDP:
purchasing power parity - $277 million
note: GDP is supplemented by grant aid, averaging perhaps $100 million annually (2002 est.)

GDP - real growth rate:
1% (2002 est.)

GDP - per capita:
purchasing power parity - $2,000 (2002 est.)

GDP - composition by sector:
agriculture: 50%
industry: 4%
services: 46% (2000 est.)

Labor force:
NA

Labor force - by occupation:
two-thirds are government employees

Unemployment rate:
16% (1999 est.)

Population below poverty line:
26.7%

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

Inflation rate (consumer prices):
1% (2002 est.)

Budget:
revenues: $161 million ($69 million less grants)
expenditures: $160 million, including capital expenditures of NA (1998 est.)

Agriculture - products:
black pepper, tropical fruits and vegetables, coconuts, cassava (tapioca), betel nuts, sweet potatoes; pigs, chickens

Industries:
tourism, construction, fish processing, specialized aquaculture, craft items from shell, wood, and pearls

Industrial production growth rate:
NA

Electricity - production:
192 million kWh (2002)

Electricity - consumption:
178.6 million kWh (2002)

Electricity - exports:
0 kWh (2002)

Electricity - imports:
0 kWh (2002)

Exports:
$22 million (f.o.b.) (FY99/00 est.)

Exports - commodities:
fish, garments, bananas, black pepper

Exports - partners:
Japan, US, Guam (2000)

Imports:
$149 million f.o.b. (FY99/00 est.)

Imports - commodities:
food, manufactured goods, machinery and equipment, beverages

Imports - partners:
US, Australia, Japan (2000)

Debt - external:
$53.1 million (FY02/03 est.)

Economic aid - recipient:
under terms of the Compact of Free Association, the US pledged $1.3 billion in grant aid during the period 1986-2001; the level of aid has been subsequently reduced

Currency (code):
US dollar (USD)

Exchange rates:
the US dollar is used