Economy - overview:
Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system (including generous housing subsidies), low unemployment, and remarkably even distribution of income. In the absence of other natural resources (except for abundant geothermal power), the economy depends heavily on the fishing industry, which provides 70% of export earnings and employs 8% of the work force. The economy remains sensitive to declining fish stocks as well as to fluctuations in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. Government policies include reducing the budget and current account deficits, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, diversifying the economy, and privatizing state-owned industries. The government remains opposed to EU membership, primarily because of Icelanders' concern about losing control over their fishing resources. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, with the recent trends in ecotourism and whale watching. Growth had been remarkably steady in 1996-2001 at 3%-5%, but could not be sustained in 2002 in an environment of global recession. Growth resumed in 2003, and estimates call for strong growth until 2007, slowly dropping until the end of the decade.
GDP:
purchasing power parity - $9.373 billion (2004 est.)
GDP - real growth rate:
1.8% (2004 est.)
GDP - per capita:
purchasing power parity - $31,900 (2004 est.)
GDP - composition by sector:
agriculture: 11.2%
industry: 9.6%
services: 79.2% (2004 est.)
Labor force:
158,100 (2004 est.)
Labor force - by occupation:
agriculture, fishing and fish processing 10.3%, industry 18.3%, services 71.4% (2003)
Unemployment rate:
3.1% (2004 est.)
Population below poverty line:
NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices):
4% (2004 est.)
Investment (gross fixed):
23.8% of GDP (2004 est.)
Budget:
revenues: $4.154 billion
expenditures: $4.058 billion, including capital expenditures of $467 million (2004 est.)
Public debt:
35.9% of GDP (2004 est.)
Agriculture - products:
potatoes, green vegetables, mutton, dairy products, fish
Industries:
fish processing; aluminum smelting, ferrosilicon production, geothermal power; tourism
Industrial production growth rate:
8.8% (2004 est.)
Electricity - production:
8.271 billion kWh (2002)
Electricity - consumption:
7.692 billion kWh (2002)
Electricity - exports:
0 kWh (2002)
Electricity - imports:
0 kWh (2002)
Oil - production:
0 bbl/day (2001 est.)
Oil - consumption:
16,300 bbl/day (2001 est.)
Oil - exports:
0 bbl/day (2001)
Oil - imports:
15,470 bbl/day (2001)
Current account balance:
$-570 million (2004 est.)
Exports:
$2.902 billion f.o.b. (2004 est.)
Exports - commodities:
fish and fish products 70%, aluminum, animal products, ferrosilicon, diatomite
Exports - partners:
UK 19.1%, Germany 17.1%, Netherlands 11%, US 10.2%, Spain 6.9%, Denmark 4.6% (2004)
Imports:
$3.307 billion (2004 est.)
Imports - commodities:
machinery and equipment, petroleum products; foodstuffs, textiles
Imports - partners:
Germany 12.3%, US 10%, Norway 9.8%, Denmark 7.6%, UK 6.9%, Sweden 6.4%, Netherlands 5.7% (2004)
Reserves of foreign exchange and gold:
$935 million (2004)
Debt - external:
$3.073 billion (2002)
Economic aid - donor:
$NA
Currency (code):
Icelandic krona (ISK)
Exchange rates:
Icelandic kronur per US dollar - 70.192 (2004), 76.709 (2003), 91.662 (2002), 97.425 (2001), 78.616 (2000)
Fiscal year:
calendar year
