Greenland's economy: a Treasury that rides on the price of prawns

How the prawn replaced the seal in Greenland's trade

Seal hunting carried Greenland's economy into the early twentieth century and then declined drastically, according to Britannica, and fishing for cod and shrimp took its place. The shift began inside a trade monopoly. Towards the end of the nineteenth century traders criticised the Danish monopoly for keeping Greenlanders in unprofitable ways of life and for holding back a fishing industry that could have been large. Many Greenlanders defended it, because they felt it secured the future of commercial whaling. Danish investment moved over to fishing gradually.

The Greenland Commission of 1948 to 1950 studied the island's isolation and economic stagnation, and in the end the monopolies of the Royal Greenland Trading Department were removed. Denmark then set out to urbanise the population, partly to replace a dependence on dwindling seal stocks and partly to supply workers for the cod fisheries, which were growing fast. Between 1952 and 1963 about 3,000 households moved from small coastal settlements to towns chosen for investment under the G50 and G60 reforms.

The cod fishery and the mines collapsed together in the late 1980s and early 1990s, and the damage to the economy was heavy. What remained to carry the exports was cold-water shrimp. The last lead and zinc mine closed in 1990, and Greenland has registered a deficit on its foreign trade since then. The trading department had already become Kalaallit Niuerfiat, a locally administered company, in 1986; it trades today as KNI A/S.

Sealing has shrunk without stopping. Statistics Greenland counted 98,885 seals caught in 2019 and 61,461 in 2024, the second figure preliminary. The skin is usually sold and the meat eaten or fed to sled dogs, and Great Greenland, the country's only tannery, tans about half of the sealskins traded. Import bans on seal fur abroad have held the international price at a minimum, Britannica records. Professional hunters usually do not make a full living from the hunt and fish from dinghies in summer and through the ice in winter. Sheep farming in the fjords of the south is smaller again: 14,280 sheep in 2025, down from 18,184 in 2021.

What Greenland's fishing fleets bring ashore

Fishing, hunting and agriculture employed 4,411 people on a monthly average in 2024, out of 29,131 in work, and what they catch is nearly all Greenland has to sell abroad. Statistics Greenland puts the fishing industry's share of exports at over 90% in its 2026 yearbook. The Nationalbank broke the goods exports down by species in October 2021: prawns about 50%, Greenland halibut about 25% and cod about 12%.

How the offshore and coastal fleets differ

There are two fisheries and they work in different ways. The offshore fleet is mostly factory vessels that process the catch on board. The coastal fleet, much of it open dinghies and small boats, lands its fish at factories on shore. The land-based industry is dominated by two companies, the government-owned Royal Greenland and the privately owned Polar Seafood, with a number of smaller private seafood firms appearing in recent years.

Coastal fishermen are registered as sole proprietors, which is why the proprietorship is the ordinary business form in Greenland: 2,855 of the 3,914 enterprises counted in 2022. Coastal fishing for Greenland halibut carries a large part of the local economy in the towns and settlements around Disko Bay and further north.

The mackerel and capelin rows swing by tens of thousands of tonnes from one year to the next. The prawn and halibut rows move slowly, and since 2022 both have moved down.

Why the quotas and the advice parted company

Quotas are set politically. The advice comes from the Greenland Institute of Natural Resources, Pinngortitaleriffik, which assesses what level of fishing is biologically sustainable. In 2020 the offshore prawn and offshore halibut quotas stood at about 110% of the advice, and both fisheries held MSC certification. The coastal halibut quota was about 160% of the advice, and the coastal and offshore cod quotas about 550% and 560%. The Nationalbank noted that the halibut caught in coastal waters were getting smaller year by year, which it read as a sign that the fishing was too intense.

A Fisheries Commission set up in spring 2019 reported on 23 September 2021. It found biological sustainability to be the precondition for the best long-term return from the sea. It wanted each fisherman's right limited to the quota, fixed in duration and transferable by sale, and it found more capital and labour tied up in some segments than an efficient fishery needed. The Nationalbank called the resulting changes to the Fisheries Act politically sensitive, since they touch many families, the balance between the offshore and coastal fleets, and the question of whether quotas should follow the advice at all.

Why the price of prawns reaches the Greenland Treasury

Catches are taxed by the kilo, at a rate that moves with the market price of the product. In the years before the pandemic these resource taxes reached a record of about DKK 400 million. When the price drops, the rate drops for every vessel at once, and the income and corporation tax paid out of the industry follow it down. The Nationalbank treated fish prices as a separate source of uncertainty for the Treasury, on top of the uncertainty they bring to the fishing firms.

The swings are wide. On the Nationalbank's index for prawns, halibut and cod, with 2012 at 100, prices stood at 137 in 2018 and 115 in 2020, while the volume caught went from 70 in 2015 to 105 in 2020. Prices of the main fish products fell by between 10 and 20% from the first quarter of 2020 to the first quarter of 2021, as restaurants and canteens in the export markets bought less.

Since 2022 the volume has turned against the prawn. Greenlandic vessels caught 111,211 tonnes of northern prawn in 2022 and 90,272 tonnes in 2025, a fall of almost a fifth. In April 2025 the Nationalbank reported that the shrimp stocks were shrinking after a record year for seafood exports; in January 2026 it reported that the shrimp fishery had slowed while cod was doing better. The cod catch rose from 43,694 to 64,631 tonnes over the same three years, so cod made up part of the gap. Growth was very modest in 2025, the bank wrote, public finances deteriorated surprisingly sharply, and liquidity in the Treasury fell in the second half of the year below the level judged enough to absorb swings in income and spending without borrowing. The Finance Act for 2026 tightened the budget.

The goods trade shows the same dependence from the other side.

The 2024 and 2025 columns are preliminary. Statistics Greenland describes a one-sided production that leaves households, businesses and institutions buying more or less every good they need from abroad, and apart from fishing and hunting its domestic production of commodities is very limited.

Who owns the businesses that employ Greenland

The Greenland government owned 14 public limited companies in 2021, and Statistics Greenland lists five that it owns outright in its 2026 yearbook: Royal Greenland in fishing, KNI in retail and fuel sales, Royal Arctic Line in shipping, Air Greenland in aviation and Tusass in telecommunications. Statistics Greenland describes the business sector as dominated by large publicly owned companies.

The Nationalbank added up the public payroll for 2019. The government-owned companies employed about 5,000 people, government-controlled airports and power supply about 800, and public service and administration about 11,200. Together that came to about 17,000 people, 63% of the 27,000 in work that year. Statistics Greenland's count for 2024 puts 12,733 of 29,131 employed people in public administration and service alone, and records that over 60% of employed women and over 20% of employed men work in the public sector.

What the state companies cannot stop doing

Royal Arctic Line carries freight to, from and along the coast. Air Greenland and the Arctic Umiaq ferry are heavily subsidised to reach remote settlements, and the ferry makes a single round trip a week that takes 80 hours in each direction. There are virtually no roads between towns, so the ships and the aircraft are the network. The Nationalbank pointed out in 2021 that companies doing this work cannot be shut down in financial distress and have to be kept running, so a loss in one of them lands on the Treasury. It also drew attention to high board turnover in several of them.

How the airports added to public debt

Interest-bearing debt of the government, the municipalities and the government-owned companies was about 22% of GDP at the end of 2019, against 42% for Denmark's comparable debt in 2020. The Ministry of Finance expected it to reach about DKK 9 billion in 2024, up to 45% of GDP, driven by new airports at Nuuk and Ilulissat and by municipal town development companies.

On the income side the Treasury carries the Danish block grant, DKK 4,323.7 million in 2024 and about a third of public revenue, which Greenland's politics covers as the price attached to independence. Public revenue in 2024 was DKK 14.8 billion and expenditure DKK 14.3 billion, including DKK 1.2 billion of capital spending.

Why mining has stayed small in Greenland

Cryolite, lead, zinc, silver and coal were mined at various times in the twentieth century, and the first gold mine opened in 2004. Ruby mining began in 2007. The New York Times counted two active mines in March 2025, after dozens of exploration projects, and in January 2025 the Danish economist Torben M. Andersen assessed that mining would not matter much to the economy for at least the next ten years.

Statistics Greenland's business accounts show the scale. Mining and quarrying employed 93 people on a monthly average in 2024. Value added in mining was negative in every year from 2018 to 2022, and stood at minus DKK 293 million in 2022.

Oil and gas followed a similar path. Cairn Energy began drilling offshore in 2010 and found no commercially viable oil or gas, licensing agreements were delayed as environmental concerns grew after the Deepwater Horizon spill in the Gulf of Mexico that year, and in July 2021 Greenland banned all new oil and gas exploration, officials saying the environmental price of extraction was too high.

About 80% of Greenland's electricity comes from hydropower, and the Buksefjord plant supplies Nuuk; smaller towns and villages still run on oil or diesel stations that also supply district heating. Plans to use more of the hydropower potential have included a large aluminium smelter to make an exportable product, with much of its labour expected to be imported.

What tourism adds to Greenland's income

Greenland's tourism satellite account for 2024, prepared by Ramboll for Visit Greenland, estimated that international tourists spent DKK 1,741 million in the country and Greenlanders travelling at home DKK 1,238 million more. Tourism's direct share of GDP came to DKK 1,152 million, or 4.9%, and it supported the jobs of 1,824 people a month on average, 6.2% of all employment. Air transport took 31% of what international visitors spent; accommodation and restaurants took about 10 to 11% each. Visitors' spending was equal to about 20% of total exports in the national accounts for 2024.

Apart from cruise passengers, visitors arrive by air, and in 2024 the way in moved. Nuuk Airport became the international gateway after a major expansion that year. Before it, Kangerlussuaq, far from the larger towns, took almost all international traffic.

Hotel guests from the United States numbered 2,124 in 2019, 4,109 in 2023 and 7,251 in 2025. Greenlanders themselves made up 84,215 of the hotel guests counted in 2025, and in 2021 the Nationalbank found that foreign workers accounted for a large portion of foreign bednights. The pandemic showed how exposed the trade is: in the first half of 2021 there were 75% fewer international flight passengers than in 2019, and cruise lines suspended sailings.

Where Greenland finds the workers it needs

Unemployment averaged 3.4% a month among permanent residents aged 18 to 66 in 2024. Registered job seekers fell from 3,348 in August 2013 to 1,316 in August 2021, and in Nuuk they came to 2.2% of the working-age population that month, which the Nationalbank described as full employment.

Why Nuuk lacks workers while Tasiilaq has job seekers

The shortage is uneven. Housing shortages were the principal barrier to Nuuk's growth in 2021, after years of migration from small towns and settlements. In South Greenland the population has been falling as the fisheries moved north with a warming climate, and in Tasiilaq, on the east coast, job seekers made up just under 15% of 17 to 64 year olds in August 2021.

Employers have filled the gap from abroad. In 2024, 1,096 people from outside Europe worked in Greenland on a monthly average, 299 of them in hotels and restaurants, and 2,633 came from Denmark. On 1 January 2026, 2,829 people without Danish citizenship lived in Greenland, with Filipinos, Thais and Sri Lankans the groups Statistics Greenland names. The Nationalbank reported in April 2025 a large influx of labour, especially from Asia, and difficulty recruiting for health, education and social services.

Unemployment falls with education. In 2019 unemployment was 8.4% among people with no education beyond lower secondary school, 2.5% among those with vocational training and 0.5% among those with higher education. The Nationalbank expects the population to fall by 20% by 2050, with fewer people of working age and more older people, and a 2021 model built with Greenland's Ministry of Finance put the resulting annual funding gap at 5.4% of GDP.

How incomes differ between town and settlement

Average gross income in 2024 was DKK 316,901 in towns and DKK 215,273 in settlements. In Kommuneqarfik Sermersooq, the municipality that includes Nuuk, a Nuuk resident earned on average more than twice what a settlement resident did. Men averaged DKK 327,000 and women DKK 271,000 in 2024. Residents pay 42 to 44% tax on personal income depending on the municipality.

Prices rose 3.7% from January 2025 to January 2026. Food and drink have risen faster than the rest over the longer run: with January 2008 at 100, the index for food and beverages stood at 162.3 in January 2026 against 139.4 for all consumer prices.