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Concept
Economy of the Faroe Islands
Summary
The economy of the Faroe Islands was the 166th largest in the world in 2014, having a nominal gross domestic product (GDP) of $2.613 billion per annum. GDP increased from DKK 8 billion in 1999, to 21 billion in 2019. The vast majority of Faroese exports, around 90%, consists of fishery products.
After the severe economic troubles of the early 1990s, brought on by a drop in the vital fish catch and poor management of the economy, the Faroe Islands have recently recovered, with unemployment down to 5% in mid-1998, and holding below 3% since 2006, one of the lowest rates in Europe.
High dependence on fishing (including salmon farming) means the Faroe Islands' economy remains vulnerable. The Faroese hope to broaden their economic base by building new fish-processing plants. The islands allow up to 25% foreign ownership of ocean industry decreasing gradually until 2032 when foreign ownership must end. Petroleum found close to the Faroese area gives hope for deposits in the immediate area, which may lay the basis for sustained economic prosperity. Also important are the annual subsidy from Denmark, which amounted to about 3% of the GDP.
The Faroes have one of the lowest unemployment rates in Europe (1% in 2019), but this is not necessarily a sign of a recovering economy, as many young students move to Denmark and other countries once they are finished with high school. This leaves a largely middle-aged and elderly population that may lack the skills and knowledge to take IT positions in business and industry. Since 2000, new information technology and business projects have been fostered in the Faroe Islands to attract new investment. The result from these projects is not yet known but is hoped to bring a better market economy to the Faroe Islands. The population was around 52,000 by 2019.
General salaries increased from DKK 7 billion in 2013 to DKK 10 billion in 2019. In 2020, salmon exports were DKK 3.3 billion. Fishing industries occupied 1,441 people on land and 1,341 at sea.
Official source
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