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. Under the original terms of the Compact of Free Association, the US provided $1.3 billion in grant aid during the period 1986-2001; the level of aid has been subsequently reduced. 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 current slow growth of the private sector.

GDP (purchasing power parity):
$238.1 million (2008 est.)
$277 million (2002)
note: supplemented by grant aid, averaging perhaps $100 million annually
note: data are in 2008 US dollars

GDP (official exchange rate):
$238.1 million (2008)

GDP - real growth rate:
NA
0.3% (2005 est.)

GDP - per capita:
$2,200 (2008 est.)
$2,300 (2005 est.)
note: data are in 2008 US dollars

GDP - composition by sector:
agriculture: 28.9%
industry: 15.2%
services: 55.9% (2004 est.)

Labor force:
16,360 (2008)

Labor force - by occupation:
agriculture: 0.9%
industry: 34.4%
services: 64.7%
note: two-thirds are government employees (FY05 est.)

Unemployment rate:
22% (2000 est.)

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

Budget:
revenues: $166 million ($69 million less grants)
expenditures: $152.7 million (FY07 est.)

Inflation rate (consumer prices):
2.2% (2005)

Commercial bank prime lending rate:
14.03% (31 December 2007)

Stock of money:
$22.45 million (31 December 2007)

Stock of quasi money:
$72.49 million (31 December 2007)

Stock of domestic credit:
NA

Market value of publicly traded shares:
$NA

Agriculture - products:
black pepper, tropical fruits and vegetables, coconuts, bananas, cassava (tapioca), sakau (kava), betel nuts, sweet potatoes; pigs, chickens; fish; Kosraen citrus

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)

Current account balance:
-$34.3 million (FY05 est.)

Exports:
$14 million (f.o.b.) (2004 est.)

Exports - commodities:
fish, garments, bananas, black pepper, sakau (kava), betel nut

Imports:
$132.7 million f.o.b. (2004)

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

Debt - external:
$60.8 million (FY05 est.)