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Federated States of Micronesia: Economy#

Economic activity consists of subsistence farming and fishing and government which is funded largely by Compact of Free Association (Compact) assistance provided by the US. The islands have few known mineral deposits worth commercial exploration. The potential for tourism is also limited by isolation, lack of adequate facilities, and limited air and water connections hinder development. Under the terms of the original Compact, the US provided $1.3 billion in grants and aid in 1986-2001. The US and the Federated States of Micronesia (FSM) negotiated a second (amended) Compact agreement in 2002-2003 that took effect in 2004. The amended Compact runs for a 20-year period to 2024; during which the US will provide roughly $2.1 billion to the FSM. The amended Compact also includes a Trust Fund for the people of the FSM which is to provide an income stream beyond 2024 when Compact grants are to end. The country's medium-term economic outlook appears fragile because of reduced US assistance and lackluster performance of its small and stagnant private sector.

Economic Facts#

GDP (purchasing power parity)$754 million (2013 est.)
$749.1 million (2012 est.)
$746.8 million (2011 est.)
note: data are in 2013 US dollars; GDP supplemented by grant aid, averaging perhaps $100 million annually
GDP - real growth rate0.6% (2013 est.)
2.1% (2011 est.)
GDP - per capita (PPP)$7,300 (2013 est.)
$7,200 (2012 est.)
$7,200 (2011 est.)
note: data are in 2013 US dollars
GDP - composition, by sector of originagriculture: 14%
industry: 12%
services: 74% (2011 est.)
Population below poverty line26.7% (2000)
Household income or consumption by percentage sharelowest 10%: NA%
highest 10%: NA%
Labor force - by occupationagriculture: 0.9%
industry: 20.6%
services: 78.5%
note: two-thirds of the labor force are government employees (2011 est.)
Exports - commoditiesfish, garments, bananas, black pepper, sakau (kava), betel nuts
Agriculture - productsblack pepper, tropical fruits and vegetables, coconuts, bananas, cassava (manioc, tapioca), sakau (kava), Kosraen citrus, betel nuts, sweet potatoes; pigs, chickens; fish
Budgetrevenues: $107 million
expenditures: $102 million (FY10/11 est.)
Imports - commoditiesfood, manufactured goods, machinery and equipment, beverages
Exchange ratesthe US dollar is used
Exports$24.9 million (2009 est.)
$14 million (2004 est.)
Debt - external$60.8 million (FY05 est.)
Fiscal year1 October - 30 September
Imports$132.7 million (2004)
Industrial production growth rateNA%
Industriestourism, construction; fish processing, specialized aquaculture; craft items (from shell, wood, and pearls)
Inflation rate (consumer prices)3.4% (2011 est.)
3.5% (2010 est.)
Labor force15,920 (2011)
Unemployment rate22% (2000 est.)
Current account balance-$34.3 million (FY05 est.)
Reserves of foreign exchange and gold$75.06 million (31 December 2011 est.)
$75.06 million
GDP (official exchange rate)$339 million (2013 est.)
Commercial bank prime lending rate14.35% (31 December 2013 est.)
14.35% (31 December 2012 est.)
Stock of domestic credit$-56.77 million (31 December 2011 est.)
$56.77 million
Stock of narrow money$27.22 million (31 December 2011 est.)
$27.22 million
Stock of broad money$118.4 million (31 December 2011 est.)
$113.9 million (31 December 2010 est.)
Taxes and other revenues31.6% of GDP (FY10/11 est.)
Budget surplus (+) or deficit (-)1.5% of GDP (FY10/11 est.)