Advanced search
image
Travel & living abroad

Europe

Iceland

 Flag of Iceland

Last reviewed: 03 April 2009 

Country information

ECONOMY

Basic Economic Facts

GDP: US $15.8bn (2005)
GDP per head: US $53,472 / £28,391 (2005)
Annual Growth: 5.5% (2005)
Inflation: 7.3% (Dec 2006)
Major Industries: Fish processing, aluminium smelting, ferrosilicon production, geothermal power, tourism, pharmaceuticals
Major trading partners: UK, Germany, Netherlands, Denmark, US, Norway
Exchange rate: £1 = 123 Icelandic Krona (ISK) (May 2007)
Unemployment: 1% 2006

Icelanders enjoy a per capita income amongst the highest in Europe, but Iceland's economic outlook has always depended on its large fishing industry, which, as its main export earner (60 per cent of its merchandise exports and 30% of its total are marine products), is also responsible for 7-8 per cent of its GDP. Fish remains important to Iceland's economy but is no longer as susceptible to movements in the world price of fish products and to fluctuations in the size of its catches as it once was. Because of over-fishing in the 1980s the Icelandic government has introduced a successful management system to allow stocks to recover. Direct foreign investment in the fishing industry is not allowed. Less than five per cent of Iceland is arable land, but good grazing keeps the country self-sufficient in meat and dairy products. The breeding and export of Iceland horses is a growing business.

Iceland's efforts of the last 15 years to diversify away from fishing is now reflected by excellent economic figures. With plenty of clean, cheap fuel, energy intensive industry is high on the list. Two aluminium smelters are in operation, the capacity of both has been expanded and will be expanded more in the next few years. A third - Alcoa owned and by far the largest capacity - is being built and is to start operations in April 2007. Information technology and bio-genetics are of growing importance in an increasingly knowledge-based economy. As is finance and overseas investment. The three main banks (KB, Landsbanki and Glitnir) have been among the fastest growing in the world over the last 2 or 3 years (2004-2006) with some 60% of their profits now coming from their overseas operations - much of it in the UK.

Tourism is now a major foreign exchange earner with some 400,000 coming in 2005-2006. Whale-watching has been growing and now attracts some 20% of visitors to Iceland and makes a significant contribution to the economy. In 2006, 70-80,000 visitors from Britain came to Iceland (the largest national group).

Further information about Iceland's economy can be found at UK Trade and Investment and Statistics Iceland.

www.hagstofa.is

Country information

Pick Another Country :

Share this with: