Economy of Gibraltar is dependent on tourism, shipping, the internet, and financial center activities. Earlier, UK Ministry of Defense served as a major source of revenue for Gibraltar. But now, British military contributions account for only 11 percent of Gibraltar’s economy.
Economic freedom of Gibraltar
Low taxes contribute heavily to Gibraltar’s economic freedom. Large gaming and betting companies have set up business in Gibraltar because of low-tax regime in the country. Improved telecommunication facilities add to the attractiveness of doing business in Gibraltar.
According to CIA’s World Factbook figures, Gibraltar’s GDP reached $1.066 billion in 2005. That was nearly a 7 percent increase over previous year GDP of Gibraltar. GDP per capita stood at around $38,000 in 2005.
In 2005, inflation in Gibraltar hovered around 3 percent. In 2006, inflation came down to 2.6 percent. In 2007 and subsequent years, inflation in Gibraltar was expected to remain somewhere between 2 percent and 3 percent.
Imports and exports
As per 2005 figures recorded in CIA's World Factbook, goods and services worth about $2.967 were imported into Gibraltar. Major import commodities that were brought into Gibraltar included fuels, foodstuffs, and manufactured goods. Important import partners for Gibraltar were Spain, Russia, Italy, UK, and France.
In 2005, Gibraltar exported goods and services worth more than $270 million. Petroleum continued to be a dominant export commodity for Gibraltar followed by manufactured goods. Unlike imports, Spain lies 2nd in the list of major export partners for Gibraltar, with UK occupying number one position.
Housing sector is a bit of a worry area for Gibraltar with cost of houses going beyond the reach of an average income earner. Also, Government of Gibraltar is often criticized for its inefficient public services. Health and transport services can do with a major revamp.
Future of Gibraltar
Future of Gibraltar looks bright with a lot depending on finance, shipping and tourism sectors. Visitors in Gibraltar run in excess of 7 million people. Technology sector is also predicted to become a mainstay of Gibraltar’s economy, with betting and gaming companies generating significant amount of revenues for the government.