Economy—overview: With independence from Ethiopia on 24 May 1993, Eritrea faced the bitter economic problem of a small, desperately poor African country. The economy is largely based on subsistence agriculture, with over 70% 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. Eritrea has long-term prospects for revenues 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., overcoming 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 armed conflict with Ethiopia.
GDP: purchasing power parity—$2.5 billion (1998 est.)
GDP—real growth rate: 5% (1998 est.)
GDP—per capita: purchasing power parity?$660 (1998 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): 8% (1998 est.)
Labor force: NA
Unemployment rate: NA%