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Economy of Liberia


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Liberia is one of the world's poorest countries, with a formal employment rate of only 15%. GDP per capita peaked in 1980 at US$496, when it was comparable to Egypt's (at the time). In 2011, the country's nominal GDP was US$1.154 billion, while nominal GDP per capita stood at US$297, the third-lowest in the world. Historically, the Liberian economy has depended heavily on foreign aid, foreign direct investment and exports of natural resources such as iron ore, rubber and timber.
Following a peak in growth in 1979, the Liberian economy began a steady decline due to economic mismanagement following the 1980 coup. This decline was accelerated by the outbreak of civil war in 1989; GDP was reduced by an estimated 90% between 1989 and 1995, one of the fastest declines in history. Upon the end of the war in 2003, GDP growth began to accelerate, reaching 9.4% in 2007. The global financial crisis slowed GDP growth to 4.6% in 2009, though a strengthening agricultural sector led by rubber and timber exports increased growth to 5.1% in 2010 and an expected 7.3% in 2011, making the economy one of the 20 fastest growing in the world. Current impediments to growth include a small domestic market, lack of adequate infrastructure, high transportation costs, poor trade links with neighboring countries and the high dollarization of the economy. Liberia used the United States dollar as its currency from 1943 until 1982 and continues to use the U.S. dollar alongside the Liberian dollar. Following a decrease in inflation beginning in 2003, inflation spiked in 2008 as a result of worldwide food and energy crises, reaching 17.5% before declining to 7.4% in 2009. Liberia's external debt was estimated in 2006 at approximately $4.5 billion, 800% of GDP. As a result of bilateral, multilateral and commercial debt relief from 2007–2010, the country's external debt fell to $222.9 million by 2011.
While official commodity exports declined during the 1990s as many
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Cities & Places in Liberia