Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Faroese economy grows despite high global uncertainty
The Faroese economy continues to be characterised by pressure on the labour market and rising house prices. The high economic activity has also been reflected in increasing lending growth, with a particularly strong increase in lending corporates. However, the economy has slowed after a few years of strong growth, driven mainly by the development of the fishing and aquaculture industries. Exports are sensitive to global conditions, and lower fishing quotas are on the horizon. This creates a high level of uncertainty for a small, open and relatively undiversified economy like the Faroe Islands. Economic policy should focus on increasing the economy’s resilience.
Key messages
Why is it important?
Danmarks Nationalbank is the central bank for the entire Danish Realm. We therefore continuously analyse the development in the Faroese and Greenlandic economies to live up to our purpose of ensuring stable prices and ensuring the best basis for assessing the possible emergence of socio-economic imbalances.
Main chart
Facts about the Faroe Islands
Note:
GDP growth is calculated in real terms.
Source:
Hagstova Føroya (Statistics Faroe Islands).