Foreign trade is important for a small country like the Faroe Islands. In fact, one might argue that it is by trading goods with other countries that the Faroe Islands have grown so rich and reached a standard of living comparable to other western countries. Imports make up a large proportion of the GDP of the Faroese economy. To pay for these imports, exports are a similarly large proportion of the GDP.
The most important trading partners are the neighbouring countries, Denmark, Norway and the United Kingdom. More than 80 per cent of the merchandise exports are fish products, while the imported goods consist of a wide range of consumer goods, goods for production and investment goods.
Since the late 1980s, the Faroese balance of trade has been mainly positive reflecting economic recession during most of the 1990s. Since 2003 the balance of trade has been negative, mainly because of high oil prices and some big vessels being imported.
