Micronesia, Federated States of country flag

Micronesia, Federated States of - Economy

Geography - People - Economy - Government - Communications - Transportation - Military - Transnational Issues

Micronesia, Federated States of is located Oceania, island group in the North Pacific Ocean, about three-quarters of the way from Hawaii to Indonesia. The climate is tropical; heavy year-round rainfall, especially in the eastern islands; located on southern edge of the typhoon belt with occasionally severe damage. The terrain is islands vary geologically from high mountainous islands to low, coral atolls; volcanic outcroppings on Pohnpei, Kosrae, and Chuuk.

Economy - overview

This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
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)

This entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per- capita welfare and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment); as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services. In addition, many countries do not formally participate in the World Bank's PPP project that calculates these measures, so the resulting GDP estimates for these countries may lack precision. For many developing countries, PPP-based GDP measures are multiples of the official exchange rate (OER) measure. The difference between the OER- and PPP- denominated GDP values for most of the wealthy industrialized countries are generally much smaller.
GDP (purchasing power parity) : $277 million; note - supplemented by grant aid, averaging perhaps $100 million annually (2002 est.)

GDP (official exchange rate)

This entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output. Many economists prefer this measure when gauging the economic power an economy maintains vis-a-vis its neighbors, judging that an exchange rate captures the purchasing power a nation enjoys in the international marketplace. Official exchange rates, however, can be artificially fixed and/or subject to manipulation - resulting in claims of the country having an under- or over-valued currency - and are not necessarily the equivalent of a market-determined exchange rate. Moreover, even if the official exchange rate is market-determined, market exchange rates are frequently established by a relatively small set of goods and services (the ones the country trades) and may not capture the value of the larger set of goods the country produces. Furthermore, OER-converted GDP is not well suited to comparing domestic GDP over time, since appreciation/depreciation from one year to the next will make the OER GDP value rise/fall regardless of whether home- currency-denominated GDP changed.
GDP (official exchange rate) : $232 million (2005)

GDP - real growth rate

This entry gives GDP growth on an annual basis adjusted for inflation and expressed as a percent.
GDP - real growth rate : 0.3% (2005 est.)

GDP - per capita (PPP)

This entry shows GDP on a purchasing power parity basis divided by population as of 1 July for the same year.
GDP - per capita (PPP) : $2,300 (2005 est.)

GDP


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

Labor force

This entry contains the total labor force figure.
Labor force : 37,410 (2000)
Labor force - by occupation - agriculture : 0.9%
Labor force - by occupation - industry : 34.4%
Labor force - by occupation - services : 64.7%
Labor force - by occupation - note : two-thirds are government employees (FY05 est.)

Unemployment rate

This entry contains the percent of the labor force that is without jobs. Substantial underemployment might be noted.
Unemployment rate : 22% (2000 est.)

Population below poverty line


Population below poverty line : 26.7% (2000)

Household income or consumption by percentage share

Data on household income or consumption come from household surveys, the results adjusted for household size. Nations use different standards and procedures in collecting and adjusting the data. Surveys based on income will normally show a more unequal distribution than surveys based on consumption. The quality of surveys is improving with time, yet caution is still necessary in making inter-country comparisons.
Household income or consumption by percentage share - lowest 10% : NA%
Household income or consumption by percentage share - highest 10% : NA%

Budget

This entry includes revenues, expenditures, and capital expenditures. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Budget - revenues : $127.3 million ($69 million less grants)
Budget - expenditures : $144.2 million (FY05 est.)

Fiscal year


Fiscal year : 1 October - 30 September

Inflation rate (consumer prices)

This entry furnishes the annual percent change in consumer prices compared with the previous year's consumer prices.
Inflation rate (consumer prices) : 2.2% (2005)

Commercial bank prime lending rate

This entry provides a simple average of annualized interest rates commercial banks charge on new loans, denominated in the national currency, to their most credit- worthy customers.
Commercial bank prime lending rate : 14.03% (31 December 2007)

Stock of money

This entry, also known as "M1," comprises the total quantity of currency in circulation (notes and coins) plus demand deposits denominated in the national currency, held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy. The national currency units have been converted to US dollars at the closing exchange rate on the date of the information.
Stock of money : $22.45 million (31 December 2007)

Stock of quasi money

This entry comprises the total quantity of time and savings deposits denominated in the national currency, held by nonbank financial institutions, state and local governments, nonfinancial public enterprises, and the private sector of the economy. When added together with "M1" the total money supply is known as "M2." The national currency units have been converted to US dollars at the closing exchange rate on the date of the information.
Stock of quasi money : $72.49 million (31 December 2007)

Stock of domestic credit

This entry is the total quantity of credit, denominated in the domestic currency, provided by banks to nonbanking institutions. The national currency units have been converted to US dollars at the closing exchange rate on the date of the information.
Stock of domestic credit : NA (31 December 2007)

Agriculture - products

This entry is an ordered listing of major crops and products starting with the most important.
Agriculture - products : black pepper, tropical fruits and vegetables, coconuts, bananas, cassava (tapioca), sakau (kava), betel nuts, sweet potatoes; pigs, chickens; fish

Industries

This entry provides a rank ordering of industries starting with the largest by value of annual output.
Industries : tourism, construction; fish processing, specialized aquaculture; craft items (from shell, wood, and pearls)

Industrial production growth rate

This entry gives the annual percentage increase in industrial production (includes manufacturing, mining, and construction).
Industrial production growth rate : NA%

Electricity - production

This entry is the annual electricity generated expressed in kilowatt-hours. The discrepancy between the amount of electricity generated and/or imported and the amount consumed and/or exported is accounted for as loss in transmission and distribution.
Electricity - production : 192 million kWh (2002)

Electricity - consumption

This entry consists of total electricity generated annually plus imports and minus exports, expressed in kilowatt-hours. The discrepancy between the amount of electricity generated and/or imported and the amount consumed and/or exported is accounted for as loss in transmission and distribution.
Electricity - consumption : 178.6 million kWh (2002)

Electricity - exports

This entry is the total exported electricity in kilowatt-hours.
Electricity - exports : 0 kWh (2002)

Electricity - imports

This entry is the total imported electricity in kilowatt-hours.
Electricity - imports : 0 kWh (2002)

Electricity


Electricity - production by source : NA

Current account balance

This entry records a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Current account balance : -$34.3 million (FY05 est.)

Exports

This entry provides the total US dollar amount of merchandise exports on an f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Exports : $14 million (f.o.b.) (2004 est.)

Exports - commodities

This entry provides a listing of the highest- valued exported products; it sometimes includes the percent of total dollar value.
Exports - commodities : fish, garments, bananas, black pepper, sakau (kava), betel nut

Exports - partners

This entry provides a rank ordering of trading partners starting with the most important; it sometimes includes the percent of total dollar value.
Exports - partners : Japan, US, Guam (2006)

Imports

This entry provides the total US dollar amount of merchandise imports on a c.i.f. (cost, insurance, and freight) or f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Imports : $132.7 million f.o.b. (2004)

Imports - commodities

This entry provides a listing of the highest- valued imported products; it sometimes includes the percent of total dollar value.
Imports - commodities : food, manufactured goods, machinery and equipment, beverages

Imports - partners

This entry provides a rank ordering of trading partners starting with the most important; it sometimes includes the percent of total dollar value.
Imports - partners : US, Japan, Hong Kong (2006)

Economic aid


Economic aid - recipient : $106.4 million (2005)

Debt - external

This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
Debt - external : $60.8 million (FY05 est.)

Market value of publicly traded shares

This entry gives the value of shares issued by publicly traded companies at a price determined in the national stock markets on the final day of the period indicated. It is simply the latest price per share multiplied by the total number of outstanding shares, cumulated over all companies listed on the particular exchange.
Market value of publicly traded shares : $NA

Currency (code)


Currency (code) : US dollar (USD)

Currency code


Currency code : USD

Exchange rates

This entry provides the official value of a country's monetary unit at a given date or over a given period of time, as expressed in units of local currency per US dollar and as determined by international market forces or official fiat. The International Organization for Standardization (ISO) 4217 alphabetic currency code for the national medium of exchange is presented in parenthesis.
Exchange rates : the US dollar is used


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