section_path: Economy
section_name: Economy
paragraph_text: Economy
  
  The single most important factor in the Greenlandic economy is financial aid from Denmark, mainly in the form of the bloktilskud (block grant). In 2024, the bloktilskud to Greenland was 4.3 billion kr, in of itself amounting to a third of the island's total public revenue. On top of this, the Danish state covered the expenses for i.a. judiciary and defence, which together were estimated to amount to over 1 billion kr. As of 2019 it subsidizes Greenland with 4.3 billion kr. annually, up from 3,6 billion kr. in 2009.
  
  The Greenlandic economy is highly dependent on fishing. Fishing accounts for more than 90% of Greenland's exports. The shrimp and fish industry is by far the largest income earner. Greenland is abundant in minerals, but extraction has been limited. A state company, Nunaoil, was created to help develop the hydrocarbon industry in Greenland. However, in July 2021, Greenland banned all new oil and gas exploration in its territory, after government officials said that the environmental "price of oil extraction is too high".
  
  Greenland is a very difficult place to extract natural resources, for a number of reasons, including extreme weather conditions and a strong environmentalist community. The New York Times reported in March 2025 that, despite dozens of exploratory projects, there are only two active mines in Greenland.
  
  Electricity has traditionally been generated by oil or diesel power plants, even if there is a large surplus of potential hydropower. There is a programme to build hydropower plants. The first, and still the largest, is Buksefjord hydroelectric power plant.
  
  There are also plans to build a large aluminium smelter, using hydropower to create an exportable product. It is expected that much of the labour needed will be imported.
  
  The European Union has urged Greenland to restrict development by the People's Republic of China of rare-earth mineral projects, as China accounts for 95% of the world's current supply. However, in early 2013 the government of Greenland said that it had no plans to impose such restrictions.
  
  The public sector, including publicly owned enterprises and the municipalities, plays a dominant role in Greenland's economy. About half the government revenues come from grants from the Danish government, an important supplement to the gross domestic product (GDP). Gross domestic product per capita is equivalent to that of the average economies of Europe.
  
  Greenland suffered an economic contraction in the early 1990s. Since 1993, the economy has improved. The Greenland Home Rule Government (GHRG) has pursued a tight fiscal policy since the late 1980s, which has helped create surpluses in the public budget and low inflation. Since 1990, Greenland has registered a foreign-trade deficit following the closure of the last remaining lead and zinc mine that year. In 2017, new sources of ruby in Greenland have been discovered, promising to enhance the gemstone industry in Greenland and add a new export.
  
  The single most important factor in the Greenlandic economy is financial aid from Denmark, mainly in the form of the bloktilskud (block grant). In 2024, the bloktilskud to Greenland was 4.3 billion kr, in of itself amounting to a third of the island's total public revenue. On top of this, the Danish state covered the expenses for i.a. judiciary and defence, which together were estimated to amount to over 1 billion kr. As of 2019 it subsidizes Greenland with 4.3 billion kr. annually, up from 3,6 billion kr. in 2009.
  
  The Greenlandic economy is highly dependent on fishing. Fishing accounts for more than 90% of Greenland's exports. The shrimp and fish industry is by far the largest income earner. Greenland is abundant in minerals, but extraction has been limited. A state company, Nunaoil, was created to help develop the hydrocarbon industry in Greenland. However, in July 2021, Greenland banned all new oil and gas exploration in its territory, after government officials said that the environmental "price of oil extraction is too high".
  
  Greenland is a very difficult place to extract natural resources, for a number of reasons, including extreme weather conditions and a strong environmentalist community. The New York Times reported in March 2025 that, despite dozens of exploratory projects, there are only two active mines in Greenland.
  
  Electricity has traditionally been generated by oil or diesel power plants, even if there is a large surplus of potential hydropower. There is a programme to build hydropower plants. The first, and still the largest, is Buksefjord hydroelectric power plant.
  
  There are also plans to build a large aluminium smelter, using hydropower to create an exportable product. It is expected that much of the labour needed will be imported.
  
  The European Union has urged Greenland to restrict development by the People's Republic of China of rare-earth mineral projects, as China accounts for 95% of the world's current supply. However, in early 2013 the government of Greenland said that it had no plans to impose such restrictions.
  
  The public sector, including publicly owned enterprises and the municipalities, plays a dominant role in Greenland's economy. About half the government revenues come from grants from the Danish government, an important supplement to the gross domestic product (GDP). Gross domestic product per capita is equivalent to that of the average economies of Europe.
  
  Greenland suffered an economic contraction in the early 1990s. Since 1993, the economy has improved. The Greenland Home Rule Government (GHRG) has pursued a tight fiscal policy since the late 1980s, which has helped create surpluses in the public budget and low inflation. Since 1990, Greenland has registered a foreign-trade deficit following the closure of the last remaining lead and zinc mine that year. In 2017, new sources of ruby in Greenland have been discovered, promising to enhance the gemstone industry in Greenland and add a new export.