Iceland Economy 2007

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 nearly 70% of export earnings and employs 6% 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 current account deficit, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, and diversifying the economy. 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. Since 2000 growth has varied from -1% in 2002 to 8% in 2004. The 2006 closure of the US military base at Keflavik had very little impact on the national economy; Iceland's low unemployment rate aided former base employees in finding alternate employment.

GDP (purchasing power parity):
$11.38 billion (2006 est.)

GDP (official exchange rate):
$13.71 billion (2006 est.)

GDP - real growth rate:
2.6% (2006 est.)

GDP - per capita (PPP):
$38,000 (2006 est.)

GDP - composition by sector:
agriculture: 5.6%
industry: 25%
services: 69.4% (2006 est.)

Labor force:
175,000 (2006 est.)

Labor force - by occupation:
agriculture: 5.1%
industry: 23%
services: 71.4% (2005)

Unemployment rate:
1.3% (2006 est.)

Population below poverty line:
NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices):
6.7% (2006 est.)

Investment (gross fixed):
32% of GDP (2006 est.)

Budget:
revenues: $7.603 billion
expenditures: $6.737 billion (2006 est.)

Public debt:
31.5% of GDP (2006 est.)

Agriculture - products:
potatoes, green vegetables; mutton, dairy products; fish

Industries:
fish processing; aluminum smelting, ferrosilicon production; geothermal power, tourism

Industrial production growth rate:
5% (2006 est.)

Electricity - production:
8.533 billion kWh (2005)

Electricity - consumption:
8.152 billion kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
0 bbl/day (2004 est.)

Oil - consumption:
20,560 bbl/day (2004 est.)

Oil - exports:
0 bbl/day (2004)

Oil - imports:
17,450 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006)

Natural gas - production:
0 cu m (2005 est.)

Natural gas - consumption:
0 cu m (2005 est.)

Current account balance:
$-4.456 billion (2006 est.)

Exports:
$3.477 billion f.o.b. (2006 est.)

Exports - commodities:
fish and fish products 70%, aluminum, animal products, ferrosilicon, diatomite

Exports - partners:
Netherlands 16.5%, UK 15.7%, Germany 15%, US 10.8%, Spain 6.4% (2006)

Imports:
$5.716 billion (2006 est.)

Imports - commodities:
machinery and equipment, petroleum products, foodstuffs, textiles

Imports - partners:
US 12.8%, Germany 12.3%, Norway 7.1%, Sweden 6.9%, Denmark 6.1%, UK 5.3%, China 5.3%, Netherlands 4.8%, Japan 4.1% (2006)

Economic aid - donor:
$6.7 million (2004)

Reserves of foreign exchange and gold:
$2.342 billion (2006 est.)

Debt - external:
$3.073 billion (2002)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$27.8 billion (2005)

Currency (code):
Icelandic krona (ISK)

Exchange rates:
Icelandic kronur per US dollar - 70.195 (2006), 62.982 (2005), 70.192 (2004), 76.709 (2003), 91.662 (2002)