thumb|Charlotte Amalie Harbor, Saint Thomas, U.S. Virgin Islands
The economy of the United States Virgin Islands is primarily dependent upon tourism, trade, and other services, accounting for nearly 60% of the Virgin Island's GDP and about half of total civilian employment. Close to two million tourists per year visit the islands. The government is the single largest employer. The agriculture sector is small, with most food being imported. The manufacturing sector consists of rum distilling, electronics, pharmaceuticals, and watch assembly. Rum production is significant. Shipments during a six-month period of fiscal year 2016 totaled 8,136.6 million proof gallons.
This US territory uses US currency and its fiscal year is 1 October - 30 September.
History
During the slave days of what was then the Danish West Indies, the islands cultivated cash crops to earn money. On July 3, 1848, after a rebellion the previous day, the governor Peter von Scholten granted the slaves emancipation, which was against the wishes of Danish Crown. Although some plantation owners refused to accept the abolition, some 5,000 blacks were freed while another 17,000 remained enslaved. In that era, slaves labored mainly on sugar plantations. Other crops included cotton and indigo. Over the following years, strict labor laws were implemented several times, leading planters to abandon their estates, causing a significant drop in population and the overall economy. In the late 1800, numerous natural disasters added to worsen the situation.
After the US purchased the islands from Denmark in 1917, the situation began to improve, though very slowly. By 1970, the economy had been boosted due to tourism and manufacturing. Tourism started to increase more significantly in the 1990s. New hotels, restaurants, and shops began to be built; this led to more jobs and an influx of immigrants which increased the population.
The HOVENSA oil refinery stopped exporting petroleum products in 2014. In the final
year of full refinery operations, the value of exported petroleum products was $12.7 billion (2011 fiscal year). In 2013, federal programs and grants of $241.4 million contributed 19.7% of the territory's total revenues.
Major airlines travel to and from St. Thomas and St. Croix. Some 93 percent of tourists are from other areas of the US.
An industry (World Travel & Tourism Council) publication indicates that money spent by foreign visitors totaled $1,318.7 million. According to this report, Travel & Tourism generated 5,000 jobs directly in 2014, being 10.8% of total employment and 11.3 percent of the GDP. (This includes employment by hotels, travel agents, airlines and other passenger transportation services. It also includes the activities of the restaurant and leisure industries directly supported by tourists.) The total contribution of Travel & Tourism to GDP (including wider effects from investment) was 12,000 jobs in 2014 (27.0% of total employment and 29.9 percent of the total GDP).
These figures on employment are lower than the estimated by some other agencies' for the tourism industry based on their own research. (However, agencies differ as to the types of jobs they classify as being in tourism.) For example, Euromonitor indicates that over 50 percent of the workforce is employed in some tourism-related work. Analysts reviewing the economy often point to the closure of the Hovensa oil refinery which had been the islands’ largest private sector employer. This certainly did affect the local economy, leaving 2,200 people jobless. The islands' exports dropped after the 2012 closing of the refinery, from $3.339 billion to $2.627 billion. However, imports dropped as well, from $3.056 billion to $2.694 billion.
The CIA's World Factbook stated that in 2013, "the economy remains relatively diversified. Along with a vibrant tourism industry, rum exports, trade, and services will be major income sources in future years". began bringing broadband internet access to the territory, in an effort to stimulate the technology sector and business generally. Today, broadband service is readily available via wireless and cable. Cellular phone service is also
widely available on all four islands from several providers.
Some news media were reporting a financial crisis by January or February 2017. The USVI's overall tax-supported debt was $2 billion on January 23, which is very high considering the moderate population. That translated to a per capita debt of $19,000, which was worse than the per capita debt in Puerto Rico which was undergoing a severe financial crisis at the time. A Debtwire analyst writing in Forbes indicated that nothing short of a miracle would prevent a financial collapse.
By February 15, 2017, the GVI was short $110 million in its current budget (structural deficit). Governor Kenneth Mapp issued an executive order that limited the use of government-owned vehicles, puts a freeze on non-essential hiring, suspended wage negotiations, and froze non-essential travel paid for by the GVI. Some jobs are exempt from the hiring freeze: positions of civil servants whose salaries are paid through federal funds, human service workers, teachers, and those working in agencies under federal consent decrees like police and corrections officers.
On February 16, Dept. of Finance Commissioner and Public Finance Authority Executive Director, Valdamier Collens said the government had only two days of cash on hand, instead of the typical 15 or 16 days in recent months. The government introduced a bill labelled as a "sin tax", with a plan to introduce or to increase taxes. Commodities affected would include rum, tobacco products, beer and sugary drinks, as well as timeshare unit owners and internet purchases. "If we are able to pass measures that investors will view as we are addressing our structural deficit, that would bode well to the investors, but they're not going to jump out tomorrow and say, ‘Oh, come back to the market’," Collens said. Mapp's response to the coalition included his understanding of the group's recommended strategies:
"For example, the chambers are asking that we slash the salaries of all government workers by 30 percent, that we increase property taxes on residential and commercial property and that we impose an income tax surcharge on the salaries of all workers in the Territory," he said. "These draconian recommendations of the Chambers of Commerce to avoid the imposition of a 25 cents tax on a bottle of beer or a 50 cents tax on a bottle of rum. It's now time to put our people ... first."