Palau Economy Profile 2008

Economy - overview

The economy consists primarily of tourism, subsistence agriculture, and fishing. The government is the major employer of the work force relying heavily on financial assistance from the US. The Compact of Free Association with the US, entered into after the end of the UN trusteeship on 1 October 1994, provided Palau with up to $700 million in US aid for the following 15 years in return for furnishing military facilities. Business and tourist arrivals numbered 63,000 in 2003. The population enjoys a per capita income roughly 50% higher than that of the Philippines and much of Micronesia. Long-run prospects for the key tourist sector have been greatly bolstered by the expansion of air travel in the Pacific, the rising prosperity of leading East Asian countries, and the willingness of foreigners to finance infrastructure development.

GDP (purchasing power parity)

$124.5 million
note: GDP estimates includes US subsidy (2004 est.)

GDP (official exchange rate)

$145 million (2005)

GDP - real growth rate

5.5% (2005 est.)

GDP - per capita (PPP)

$7,600 (2005 est.)

GDP - composition by sector

agriculture: 6.2%
industry: 12%
services: 81.8% (2003)

Population below poverty line

NA%

Household income or consumption by percentage share

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

Inflation rate (consumer prices)

2.7% (2005 est.)

Labor force

9,777 (2005)

Labor force - by occupation

agriculture: 20%
industry: NA%
services: NA%

Unemployment rate

4.2% (2005 est.)

Budget

revenues: $72.07 million
expenditures: $72.43 million (FY04/05 est.)

Industries

tourism, craft items (from shell, wood, pearls), construction, garment making

Industrial production growth rate

NA%

Current Account Balance

$15.09 million (FY03/04)

Agriculture - products

coconuts, copra, cassava (tapioca), sweet potatoes; fish

Exports

$5.882 million f.o.b. (2004 est.)

Exports - commodities

shellfish, tuna, copra, garments

Exports - partners

US, Japan, Singapore (2006)

Imports

$107.3 million f.o.b. (2004 est.)

Imports - commodities

machinery and equipment, fuels, metals; foodstuffs

Imports - partners

US, Singapore, Japan, South Korea (2006)

Debt - external

$0 (FY99/00)

Market value of publicly traded shares

$NA

Economic aid - recipient

$23.46 million (2005)

Currency (code)

US dollar (USD)

Exchange rates

the US dollar is used

Fiscal year

1 October - 30 September