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 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 with the US in which Micronesia received $1.3 billion in financial and technical assistance over a 15-year period until 2001. Since these revenues accounted for 57% of consolidated government revenues, reduced Compact funding resulted in a severe depression. Economic activity recovered in 1999-2001. The country's medium-term economic outlook appears 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 - $269 million (2001 est.)
note: GDP is supplemented by grant aid, averaging perhaps $100 million annually

GDP - real growth rate 2% (2001 est.)

GDP - per capita purchasing power parity - $2,000 (2001 est.)

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

Population below poverty line NA%

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

Inflation rate (consumer prices) 2.5% (2001 est.)

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%
nuclear: NA%
other: NA%
hydro: NA%

Electricity - consumption NA kWh

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

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

Exports - commodities fish, garments, bananas, black pepper

Exports - partners Japan, US, Guam

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

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

Imports - partners US, Australia, Japan

Debt - external $66.5 million (FY99/00 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

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 2002 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Micronesia, Federated States of Economy 2002 information contained here. All suggestions for corrections of any errors about Micronesia, Federated States of Economy 2002 should be addressed to the CIA.