Greenland: Economy#
The economy remains critically dependent on exports of shrimp and fish, income from resource exploration and extraction, and on a substantial subsidy from the Danish Government. The subsidy was budgeted to be about $535 million in 2015, approximately 56% of government revenues that year.The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in Greenland's economy. Greenland's real GDP contracted about 5% from 2012 to 2014. Real growth is projected for 2015 and 2016 due to increasing world prices for fish and shellfish, public construction activities, and to a small degree from increased revenues from small-scale mining.
During the last decade the Greenland Home Rule Government pursued conservative fiscal and monetary policies, but public pressure has increased for better schools, health care, and retirement systems. The public budget exhibited a deficit of 2% of GDP in 2014, but public debt remains low at about 5% of GDP.
The Greenlandic economy has benefited from increasing catches and exports of shrimp, Greenland halibut and, more recently, mackerel. Due to Greenland's continued dependence on exports of fish - which accounted for 91% of exports in 2015 - the economy remains very sensitive to external demand and price fluctuations.
The Greenlandic economy is expected to expand in 2016, but significant challenges face the island. High unemployment, structural challenges stemming from low levels of qualified labor, geographic dispersion, an undiversified economy, the long-term sustainability of the public budget, and a declining population due to emigration. Catches in fisheries have been declining in recent years and a reversal in prices will quickly lead to vulnerabilities. Hydrocarbon exploration has ceased with declining oil prices and currently only three mines are under development. The island has potential for natural resource exploitation with rare-earth, uranium, and iron ore mineral projects proposed.
Tourism offers another avenue of economic growth for Greenland, with increasing numbers of cruise lines now operating in Greenland's western and southern waters during the peak summer tourism season.
Economic Facts#
| GDP (purchasing power parity) | $2.173 billion (2014 est.) $2.154 billion (2013 est.) $2.165 billion (2012 est.) note: data are in 2011 US dollars |
|---|---|
| GDP (official exchange rate) | $2.16 billion (2011 est.) |
| GDP - real growth rate | 0.9% (2014 est.) -0.5% (2013 est.) 1.5% (2012 est.) |
| GDP - per capita (PPP) | $37,900 (2008 est.) $38,100 (2007 est.) |
| GDP - composition, by sector of origin | agriculture: 13.9% industry: 19.2% services: 67% (2012 est.) |
| Agriculture - products | sheep, cow, reindeer, fish |
| Industries | fish processing (mainly shrimp and Greenland halibut); gold, zinc, anorthosite and ruby mining; handicrafts, hides and skins, small shipyards |
| Industrial production growth rate | NA% |
| Labor force | 26,990 (2012 est.) |
| Labor force - by occupation | agriculture: 13.9% industry: 19.2% services: 67% (2012 est.) |
| Unemployment rate | 9.4% (2013 est.) 4.2% (2010 est.) |
| Population below poverty line | 9.2% (2007 est.) |
| Household income or consumption by percentage share | lowest 10%: NA% highest 10%: NA% |
| Budget | revenues: $1.72 billion expenditures: $1.68 billion (2010) |
| Taxes and other revenues | 79.6% of GDP (2010) |
| Budget surplus (+) or deficit (-) | 1.9% of GDP (2010) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 1.8% (2012 est.) 2.8% (2011 est.) |
| Exports | $384.3 million (2010) $358 million (2009) |
| Exports - commodities | fish and fish products 91% (2015 est.) |
| Exports - partners | Denmark 51.6%, China 11.1%, Japan 9.1%, Russia 7.2% (2015) |
| Imports | $814.2 million (2010) $726 million (2009) |
| Imports - commodities | machinery and transport equipment, manufactured goods, food, petroleum products |
| Imports - partners | Denmark 67.1%, Sweden 14.1%, Iceland 5.1% (2015) |
| Debt - external | $36.4 million (2010) $58 million (2009) |
| Exchange rates | Danish kroner (DKK) per US dollar - 6.865 (2016 est.) 6.7236 (2015 est.) 6.7236 (2014 est.) 5.3687 (2013 est.) 5.79 (2012 est.) |