Economy - overview: With independence from Ethiopia on 24 May 1993, Eritrea faced the economic problems of a small, desperately poor country. The economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. The small industrial sector consists mainly of light industries with outmoded technologies. Domestic output (GDP) is substantially augmented by worker remittances from abroad. Government revenues come from custom duties and taxes on income and sales. Road construction is a top domestic priority. In the long term, Eritrea may benefit from the development of offshore oil, offshore fishing, and tourism. Eritrea's economic future depends on its ability to master fundamental social and economic problems, e.g., by reducing illiteracy, promoting job creation, expanding technical training, attracting foreign investment, and streamlining the bureaucracy. The most immediate threat to the economy, however, is the possible expansion of the border conflict with Ethiopia, which broke out in May 1998. The hostilities have drained away substantial resources vital to Eritrea's economic development.

GDP: purchasing power parity - $2.9 billion (1999 est.)

GDP - real growth rate: 3% (1999 est.)

GDP - per capita: purchasing power parity - $750 (1999 est.)

GDP - composition by sector:
agriculture: 18%
industry: 20%
services: 62% (1995 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 9% (1998 est.)

Labor force: NA

Labor force - by occupation: agriculture 80%, industry and commerce 20%

Unemployment rate: NA%

Budget:
revenues: $283.9 million
expenditures: $351.6 million, including capital expenditures of $NA (1997 est.)

Industries: food processing, beverages, clothing and textiles

Industrial production growth rate: NA%

Electricity - production: 177.6 million kWh (1997 est.)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1997 est.)

Electricity - consumption: 177.6 million kWh (1997 est.)

Electricity - exports: 0 kWh (1997)

Electricity - imports: 0 kWh (1997)

Agriculture - products: sorghum, lentils, vegetables, corn, cotton, tobacco, coffee, sisal; livestock, goats; fish

Exports: $52.9 million (f.o.b., 1997)

Exports - commodities: livestock, sorghum, textiles, food, small manufactures

Exports - partners: Ethiopia 64%, Sudan 17%, Italy 5%, Saudi Arabia 2%, US, Yemen (1997)

Imports: $489.4 million (c.i.f., 1997)

Imports - commodities: processed goods, machinery, petroleum products

Imports - partners: Saudi Arabia 16%, Italy 14%, UAE 13%, Ethiopia 9%, Germany 6% (1997)

Debt - external: $76 million (1997 est.)

Economic aid - recipient: $123.1 million (1997)

Currency: 1 nafka = 100 cents

Exchange rates: nakfa per US$1 = 9.5 (January 2000), 7.6 (January 1999), 7.2 (March 1998 est.)

Fiscal year: calendar year