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Eritrea Economy
Economy - overview:
Since independence from Ethiopia on 24 May 1993, Eritrea has faced the economic problems of a small, desperately poor country. Like the economies of many African nations, the economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. The Ethiopian-Eritrea war in 1998-2000 severely hurt Eritrea's economy. GDP growth fell to zero in 1999 and to -12.1% in 2000. The May 2000 Ethiopian offensive into northern Eritrea caused some $600 million in property damage and loss, including losses of $225 million in livestock and 55,000 homes. The attack prevented planting of crops in Eritrea's most productive region, causing food production to drop by 62%. Even during the war, Eritrea developed its transportation infrastructure, asphalting new roads, improving its ports, and repairing war damaged roads and bridges. Since the war ended, 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. Erratic rainfall and the delayed demobilization of agriculturalists from the military kept cereal production well below normal, holding down growth in 2002. Eritrea's economic future depends upon its ability to master social problems such as illiteracy, unemployment, and low skills, and to open its economy to private enterprise so the diaspora's money and expertise can foster economic growth.
GDP:
purchasing power parity - $3.3 billion (2002 est.)
GDP - real growth rate:
2% (2002 est.)
GDP - per capita:
purchasing power parity - $700 (2002 est.)
GDP - composition by sector:
agriculture: 12.4%
industry: 25.3%
services: 62.4% (2003 est.)
Investment (gross fixed):
51.7% of GDP (2003)
Population below poverty line:
53% (1993/94)
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Inflation rate (consumer prices):
12.3% (2003)
Labor force:
NA (1999)
Labor force - by occupation:
agriculture 80%, industry and services 20%
Unemployment rate:
NA (2003 est.)
Budget:
revenues: $235.7 million
expenditures: $375 million, including capital expenditures of $NA (2003 est.)
Industries:
food processing, beverages, clothing and textiles
Industrial production growth rate:
NA
Electricity - production:
220.5 million kWh (2001)
Electricity - production by source:
fossil fuel: 100%
hydro: 0%
other: 0% (2001)
nuclear: 0%
Electricity - consumption:
205.1 million kWh (2001)
Electricity - exports:
0 kWh NA kWh (2001)
Electricity - imports:
0 kWh NA kWh (2001)
Oil - production:
0 bbl/day (2001 est.)
Oil - consumption:
6,000 bbl/day (2001 est.)
Oil - exports:
NA (2001)
Oil - imports:
NA (2001)
Agriculture - products:
sorghum, lentils, vegetables, corn, cotton, tobacco, coffee, sisal; livestock, goats; fish
Current account balance:
$-159 million (2003)
Exports:
$56 million f.o.b. (2003 est.)
Exports - commodities:
livestock, sorghum, textiles, food, small manufactures (2000)
Exports - partners:
Malaysia 65.7%, Italy 10.5%, France 4.4%, Canada 12.7% (2003 est.)
Imports:
$600 million f.o.b. (2003 est.)
Imports - commodities:
machinery, petroleum products, food, manufactured goods (2000)
Imports - partners:
US 42.3%, Italy 20.4%, Turkey 7.2%, Russia 5.7%, France 5.1% (2003 est.)
Reserves of foreign exchange & gold:
$28 million (2003)
Debt - external:
$311 million (2000 est.)
Economic aid - recipient:
$77 million (1999)
Currency:
nakfa (ERN)
Currency code:
ERN
Exchange rates:
nakfa (ERN) per US dollar - NA (2003), 13.9582 (2002), 11.3095 (2001), 9.5 (2000), 7.6 (1999)
Fiscal year:
calendar year
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