Macroeconomic framework

Gross domestic product

Saint-Pierre and Miquelon's gross domestic product (GDP) per capita is similar to that of France; it was at € 26,073 (current) for the archipelago, compared to € 26,619 for all of France in 2004. When the value added is broken down by economic sector, public administration leads with 43% of the creation of wealth, whereas non-financial businesses and individual entrepreneurs are responsible for 41%, households for 11% and financial institutions for 5%. When the value added is broken down by industry, it is clear that the service industry dominates the archipelago's economy, with an 83% contribution. This sector of the economy is mainly composed of administrative services (39%), business (14%) and construction (11%).

Considering consumption, investments and imports and exports, 2004 demonstrated that:

  • 56% of final consumption expenditure was from households, 43% from public administration and 1% from not-for-profit organizations;
  • investments counted for almost a quarter of the archipelago's GDP; and
  • exports represented 5% of the GDP, whereas imports accounted for almost 50%. Over the last few years, Saint-Pierre and Miquelon's annual exports totalled approximately € 6 million, whereas imports averaged € 60 million.

Exports

Exports from the archipelago are almost entirely made up of fishery products. These products are sent primarily to Spain (24.2%), the United States (18.6%) and metropolitan France (14.3%). Saint-Pierre et Miquelon being a euro enclave within a dollar zone, exports are increasingly destined to the European market to avoid the negative effects of currency fluctuations. The following table summarizes the distribution of exports.

Table 18: Exports, value (2007)

 

thousand euros

% of total

Fishery products

 

 

Fresh or frozen fish

3,003

49.7%

Salted, smoked, dried fish and fish eggs

574

9.5%

Fresh or refrigerated crustaceans

702

11.6%

Fresh or refrigerated shellfish

81

1.3%

Warehouse output

1,681

27.8%

Total exports

6,041

100%

Source: Service des douanes

 

Table 19: Exports, volume (2007)

 

tonnes

% of total

Fishery products

 

 

Fresh or frozen fish

895

53.0%

Salted, smoked, dried fish and fish eggs

124

7.3%

Fresh or refrigerated crustaceans

116

6.9%

Fresh or refrigerated shellfish

38

2.2%

Warehouse output

516

30.6%

Total exports

1,689

100%

Source: Service des douanes

 

Imports

Saint-Pierre and Miquelon depends heavily on imports, which mainly include food and petroleum products. Saint-Pierre and Miquelon's main trading partner is Canada, with metropolitan France being the second largest. The following table summarizes the distribution of imports.

Table 20: Imports, value (2007)

 

thousand euros

% of total

Products

 

 

Food products

12,642

20.5%

Petroleum products

13,347

21.7%

Other products

34,656

56.2%

Warehouse input

1,010

1.6%

Total imports

61,655

100%

Source: Service des douanes

Note: The other products include construction products and manufactured current consumption goods.

 

Table 21: Imports, volume (2007)

 

tonnes

% of total

Products

 

 

Food products

7,704

15.2%

Petroleum products

24,257

48.0%

Other products

17,127

33.9%

Warehouse input

1,453

2.9%

Total imports

50,541

100%

Source: Service des douanes

Note: The other products include construction products and common consumption goods.

 

Inflation

Inflation has fluctuated in Saint-Pierre and Miquelon over the last few years. The two main reasons for this situation are fluctuating gas prices and the fluctuations in exchange rates, especially in the value of the Canadian dollar compared to the euro. The following table shows the inflation rate in the archipelago over the last five years.

Table 22: Inflation rate in the archipelago

2003

2004

2005

2006

2007

2.1%

4.0%

8.1%

1.8%

2.8%

Source: Institut d'Émission des Départements d'Outre-mer. (2007). Annual report. (Online: www.iedom.fr/download.asp?nom=RA2007_iedom.pdf), p. 15

 

Exchange rate

The currency in circulation in Saint-Pierre and Miquelon is the euro. Consequently, the trade in goods and services is affected by the foreign exchange rate when business partners use a different currency. Among other things, the cost of imported and exported goods and services within the archipelago varies depending on the exchange rate. Thus, inflation in the archipelago increases if there is a depreciation of the euro compared to the Canadian dollar. The volume of trade can also be affected by exchange rate variations; these can create opportunities, but they can also pose a risk to the value of a contract signed in another currency. The exchange risk may discourage certain investments or trade. Financial instruments are used, however, to cover this risk and protect investors by providing forward coverage (swap), for example. These types of products are available through certain banks in Saint-Pierre and Miquelon.

The following chart compares the exchange rate of the euro to the Canadian and US dollars since 2004.