Eritrea Economy Profile 2013

Economy - overview

Since independence from Ethiopia in 1993, Eritrea has faced the economic problems of a small, desperately poor country, accentuated by the recent implementation of restrictive economic policies. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice (PFDJ). Like the economies of many African nations, a large share of the population - nearly 80% - is engaged in subsistence agriculture, but they produce only a small share of total output. Since the conclusion of the Ethiopian-Eritrea war in 2000, the government has maintained a firm grip on the economy, expanding the use of the military and party-owned businesses to complete Eritrea's development agenda. The government strictly controls the use of foreign currency by limiting access and availability. Few private enterprises remain in Eritrea. Eritrea's economy depends heavily on taxes paid by members of the diaspora. Erratic rainfall and the delayed demobilization of agriculturalists from the military continue to interfere with agricultural production, and Eritrea's recent harvests have been unable to meet the food needs of the country. Eritrea's development of copper and gold production through Canadian mining companies will drive Eritrea's economic growth over the next few years. The government is likely to continue diverting resources to its military instead of wide-scale economic development or investment plans. Eritrea's economic future depends upon its ability to master social problems such as illiteracy, unemployment, and low skills, and more importantly, on the government's willingness to support a true market economy.

GDP (purchasing power parity)

$4.412 billion (2012 est.)
$4.103 billion (2011 est.)
$3.774 billion (2010 est.)
note: data are in 2012 US dollars

GDP (official exchange rate)

$3.108 billion (2012 est.)

GDP - real growth rate

7.5% (2012 est.)
8.7% (2011 est.)
2.2% (2010 est.)

GDP - per capita (PPP)

$800 (2012 est.)
$700 (2011 est.)
$700 (2010 est.)
note: data are in 2012 US dollars

GDP - composition by sector

agriculture: 11.6%
industry: 30.6%
services: 57.8% (2012 est.)

Population below poverty line

50% (2004 est.)

Labor force

1.935 million (2007)

Labor force - by occupation

agriculture: 80%
industry and services: 20% (2004 est.)

Unemployment rate

NA%

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Investment (gross fixed)

27.5% of GDP (2012 est.)

Budget

revenues: $838.8 million
expenditures: $1.19 billion (2012 est.)

Taxes and other revenues

27% of GDP (2012 est.)

Budget surplus (+) or deficit (-)

-11.3% of GDP (2012 est.)

Public debt

118% of GDP (2012 est.)
118.5% of GDP (2011 est.)

Inflation rate (consumer prices)

17% (2012 est.)
20% (2011 est.)

Commercial bank prime lending rate

NA%

Stock of narrow money

$1.817 billion (31 December 2012 est.)
$1.471 billion (31 December 2011 est.)

Stock of money

$896.2 million (31 December 2008)
$749.1 million (31 December 2007)

Stock of quasi money

$1.053 billion (31 December 2008)
$932.9 million (31 December 2007)

Stock of broad money

$3.889 billion (31 December 2012 est.)
$3.156 billion (31 December 2011 est.)

Stock of domestic credit

$3.947 billion (31 December 2012 est.)
$3.2 billion (31 December 2011 est.)

Agriculture - products

sorghum, lentils, vegetables, corn, cotton, tobacco, sisal; livestock, goats; fish

Industries

food processing, beverages, clothing and textiles, light manufacturing, salt, cement

Industrial production growth rate

8% (2010 est.)

Current Account Balance

-$271.5 million (2012 est.)
-$127.8 million (2011 est.)

Exports

$304.5 million (2012 est.)
$415.4 million (2011 est.)

Exports - commodities

livestock, sorghum, textiles, food, small manufactures

Imports

$939.7 million (2012 est.)
$899.9 million (2011 est.)

Imports - commodities

machinery, petroleum products, food, manufactured goods

Reserves of foreign exchange and gold

$171.2 million (31 December 2012 est.)
$114.8 million (31 December 2011 est.)

Debt - external

$1.026 billion (31 December 2012 est.)
$1.013 billion (31 December 2011 est.)

Exchange rates

nakfa (ERN) per US dollar -
15.38 (2012 est.)
15.375 (2011 est.)
15.375 (2010 est.)
15.375 (2009)
15.38 (2008)

Fiscal year

calendar year