Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Fiscal planning can increase the resilience of the Faroese economy
The Faroese economy is in a boom period with low unemployment and high employment. High inflation and widespread labour market pressures in recent years have resulted in high agreed wage increases in a number of recent collective agreements. The economic boom has been going on for several years, but has not resulted in significant surpluses in public finances. For a relatively unified economy like the Faroe Islands, it is important to focus on a stability-orientated fiscal policy where good times are used to increase resilience and prepare for future challenges. In the financial sector, banks are better equipped to deal with a crisis than ever before.
Key messages
Why is it important?
Danmarks Nationalbank is the central bank for the entire Danish Realm. We therefore continuously analyse the development in the Greenlandic and Faroese economies to live up to our purpose of ensuring stable prices and ensuring the best basis for assessing the possible emergence of socio-economic imbalances.
Main chart
Facts about the Faroe Islands
Note:
GDP growth is calculated in real terms.
Source:
Hagstova Føroya and own calculations.