Economic situation
Having one of the world`s highest GDP per capita is a good starting point. However, like many industrialised countries, Faroe Islands is facing new challenges due to the process of globalisation.
As a nordic country, where wage costs are comparative high, it is easier for Faroe Islands to compete in business areas where these can be tolerated as opposed to areas where labour-intensive production is required. Faroe Islands has a competent, well educated and flexible workforce, but efforts within innovation, research and development are comparitively low.
Unemployment in Faroe Islands is very low, and the labour market is tight. Faroe Islands is in fact in severe shortage of workforce, and will need more qualified people to join the labour force.
Even though Faroe Islands is not a member EU or EEA, strong links to Denmark and EU contries means that business in Faroe Islands are greatly affected by EU policies and regulations. EU is the target of approximately 80 per cent of exports from Faroe Islands.
The National Bank of Faroe Islands declare’s that corrections are required to maintain a strong economy. The following statement is from the The National Bank’s publication of 2008:
“The Bank´s 2008 assessment shows a nominal growth in GDP of 4,7%. This implies a cesline in economic growth in 2008 conparison to 2006 and 2007. The base case scenario reveals an estimated 3,8% in wage increase.”