Faroe Islands: Current account balance as percent of GDP
For that indicator, we provide data for the Faroe Islands from 1998 to 2011. The average value for the Faroe Islands during that period was 6.16 percent with a minimum of -3.52 percent in 2007 and a maximum of 20.22 percent in 1998.
The latest value from 2011 is 7.8 percent. For comparison, the world average in 2011 based on 177
countries is -4.14 percent.
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use the country comparator to compare trends over time.
The current account of the Faroe Islands and other countries has three components: 1) the exports of goods and services minus the imports of goods and services; 2) the difference of incomes that countries pay to each other; and 3) the difference in transfers that countries make to each other. Current account deficits are reported with a minus sign and surpluses are reported with a plus sign.
A current account deficit means that the country needs to find financing for its imports. The foreign currencies it receives from selling products abroad are not enough to pay for the products it wants to buy from other countries. The needed amounts of foreign currencies can be obtained by, for example, borrowing. For instance, in the last several years the U.S. has been borrowing money from China in order to buy Chinese products.
This is not necessarily a problem. The current account deficit starts to be a problem if it exceeds 3-4 percent of GDP for many years. Over that time, the country accumulates a significant amount of foreign debt that eventually has to be repaid.
Definition: Current account balance is the sum of net exports of goods and services, net primary income, and net secondary income.