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 4% 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. 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):
$10.34 billion (2005 est.)

GDP (official exchange rate):
$13.38 billion (2005 est.)

GDP - real growth rate:
6.5% (2005 est.)

GDP - per capita (PPP):
$34,900 (2005 est.)

GDP - composition by sector:
agriculture: 11.8%
industry: 22.3%
services: 65.9% (2005 est.)

Labor force:
165,900 (2005 est.)

Labor force - by occupation:
agriculture: 10.3%
industry: 18.3%
services: 71.4% (2003)

Unemployment rate:
2.1% (2005 est.)

Population below poverty line:
NA%

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

Inflation rate (consumer prices):
4.1% (2005 est.)

Investment (gross fixed):
27.1% of GDP (2005 est.)

Budget:
revenues: $6.995 billion
expenditures: $6.761 billion; including capital expenditures of $467 million (2005 est.)

Public debt:
34% of GDP (2005 est.)

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

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

Industrial production growth rate:
14.2% (2005 est.)

Electricity - production:
8.619 billion kWh (2004)

Electricity - consumption:
8.619 billion kWh (2004)

Electricity - exports:
0 kWh (2003)

Electricity - imports:
0 kWh (2003)

Oil - production:
0 bbl/day (2003 est.)

Oil - consumption:
17,280 bbl/day (2003 est.)

Oil - exports:
0 bbl/day (2001)

Oil - imports:
15,470 bbl/day (2001)

Natural gas - production:
0 cu m (2003 est.)

Natural gas - consumption:
0 cu m (2003 est.)

Current account balance:
-$2.009 billion (2005 est.)

Exports:
$3.215 billion f.o.b. (2005 est.)

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

Exports - partners:
UK 19.1%, Germany 17.3%, Netherlands 10.7%, US 9.3%, Spain 7%, Denmark 4.8%, France 4.1% (2004)

Imports:
$4.582 billion (2005 est.)

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

Imports - partners:
Germany 12.6%, US 10.1%, Norway 9.5%, Denmark 7.6%, UK 6.8%, Sweden 6.3%, Netherlands 5.7% (2004)

Reserves of foreign exchange and gold:
$1.074 billion (2004 est.)

Debt - external:
$3.073 billion (2002)

Economic aid - donor:
$NA

Currency (code):
Icelandic krona (ISK)

Exchange rates:
Icelandic kronur per US dollar - 62.982 (2005), 70.192 (2004), 76.709 (2003), 91.662 (2002), 97.425 (2001)