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Iceland Economy 2014
http://www.theodora.com/wfbcurrent/iceland/iceland_economy.html
SOURCE: 2014 CIA WORLD FACTBOOK AND OTHER SOURCES


















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Page last updated on January 31, 2014

Economy - overview:
Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income. The economy depends heavily on the fishing industry, which provides 40% of export earnings, more than 12% of GDP, and employs nearly 5% of the work force. It 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. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, particularly within the fields of software production, biotechnology, and tourism. Abundant geothermal and hydropower sources have attracted substantial foreign investment in the aluminum sector, boosted economic growth, and sparked some interest from high-tech firms looking to establish data centers using cheap green energy, although the financial crisis has put several investment projects on hold. Much of Iceland's economic growth in recent years came as the result of a boom in domestic demand following the rapid expansion of the country's financial sector. Domestic banks expanded aggressively in foreign markets, and consumers and businesses borrowed heavily in foreign currencies, following the privatization of the banking sector in the early 2000s. Worsening global financial conditions throughout 2008 resulted in a sharp depreciation of the krona vis-a-vis other major currencies. The foreign exposure of Icelandic banks, whose loans and other assets totaled more than 10 times the country's GDP, became unsustainable. Iceland's three largest banks collapsed in late 2008. The country secured over $10 billion in loans from the IMF and other countries to stabilize its currency and financial sector, and to back government guarantees for foreign deposits in Icelandic banks. GDP fell 6.8% in 2009, and unemployment peaked at 9.4% in February 2009. GDP rose 2.7% in 2012 and unemployment declined to 5.6%. Since the collapse of Iceland's financial sector, government economic priorities have included: stabilizing the krona, implementing capital controls, reducing Iceland's high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy. Three new banks were established to take over the domestic assets of the collapsed banks. Two of them have foreign majority ownership, while the State holds a majority of the shares of the third. Iceland began making payments to the UK, the Netherlands, and other claimants in late 2011 following Iceland's Supreme Court ruling that upheld 2008 emergency legislation that gives priority to depositors for compensation from failed Icelandic banks. Iceland owes British and Dutch authorities approximately $5.5 billion for compensating British and Dutch citizens who lost deposits in Icesave when parent bank Landsbanki failed in 2008. Iceland began accession negotiations with the EU in July 2010; however, public support has dropped substantially because of concern about losing control over fishing resources and in reaction to worries over the ongoing Eurozone crisis.

GDP (purchasing power parity):
$12.69 billion (2012 est.)
country comparison to the world: 148

$12.49 billion (2011 est.)
$12.14 billion (2010 est.)
note: data are in 2012 US dollars
[see also: GDP country ranks ]

GDP (official exchange rate):
$13.47 billion (2012 est.)
[see also: GDP (official exchange rate) country ranks ]

GDP - real growth rate:
1.6% (2012 est.)
country comparison to the world: 145

2.9% (2011 est.)
-4.1% (2010 est.)
[see also: GDP - real growth rate country ranks ]

GDP - per capita:
$39,700 (2012 est.)
country comparison to the world: 27

$39,200 (2011 est.)
$38,200 (2010 est.)
note: data are in 2012 US dollars
[see also: GDP - per capita country ranks ]

Gross national saving:
9.3% of GDP (2012 est.)
country comparison to the world: 127

8.1% of GDP (2011 est.)
4.4% of GDP (2010 est.)
[see also: Gross national saving country ranks ]

GDP - composition, by end use:
household consumption: 53.7%
[see also: GDP - composition, by end use - household consumption country ranks ]
government consumption: 25.3%
investment in fixed capital: 14.5%
investment in inventories: 0.3%
exports of goods and services: 59.4%
imports of goods and services: -53.3%

(2012 est.)

GDP - composition, by sector of origin:
agriculture: 5.8%
[see also: GDP - composition, by sector of origin - agriculture country ranks ]
industry: 23.7%
services: 70.5% (2012 est.)

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

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

Industrial production growth rate:
-2.4% (2012 est.)
country comparison to the world: 160
[see also: Industrial production growth rate country ranks ]

Labor force:
180,100 (2012 est.)
country comparison to the world: 175
[see also: Labor force country ranks ]

Labor force - by occupation:
agriculture: 4.8%
[see also: Labor force - by occupation - agriculture country ranks ]
industry: 22.2%
services: 73% (2008)

Unemployment rate:
5.8% (2012 est.)
country comparison to the world: 59

7.4% (2011 est.)
[see also: Unemployment rate country ranks ]

Population below poverty line:
NA%
note: 332,100 families (2011 est.)
[see also: Population below poverty line country ranks ]

Household income or consumption by percentage share:
lowest 10%: NA%
[see also: Household income or consumption by percentage share - lowest 10% country ranks ]
highest 10%: NA%

Distribution of family income - Gini index:
28 (2006)
country comparison to the world: 123

25 (2005)
[see also: Distribution of family income - Gini index country ranks ]

Budget:
revenues: $5.879 billion
[see also: Budget revenues country ranks ]
expenditures: $6.347 billion (2012 est.)

Taxes and other revenues:
43.6% of GDP (2012 est.)
country comparison to the world: 28
[see also: Taxes and other revenues country ranks ]

Budget surplus (+) or deficit (-):
-3.5% of GDP (2012 est.)
country comparison to the world: 135
[see also: Budget surplus (+) or deficit (-) country ranks ]

Public debt:
131.8% of GDP (2012 est.)
country comparison to the world: 6

133.8% of GDP (2011 est.)
[see also: Public debt country ranks ]

Fiscal year:
calendar year

Inflation rate (consumer prices):
5.2% (2012 est.)
country comparison to the world: 150

4% (2011 est.)
[see also: Inflation rate (consumer prices) country ranks ]

Central bank discount rate:
5.4% (31 January 2012 est.)
country comparison to the world: 62

5.75% (31 December 2010 est.)
[see also: Central bank discount rate country ranks ]

Commercial bank prime lending rate:
8.33% (31 December 2012 est.)
country comparison to the world: 119

7.7% (31 December 2011 est.)
[see also: Commercial bank prime lending rate country ranks ]

Stock of narrow money:
$3.562 billion (31 December 2012 est.)
country comparison to the world: 111

$4.053 billion (31 December 2011 est.)
[see also: Stock of narrow money country ranks ]

Stock of broad money:
$12.57 billion (31 December 2010 est.)
country comparison to the world: 97

$12.68 billion (31 December 2010 est.)
[see also: Stock of broad money country ranks ]

Stock of domestic credit:
$18.96 billion (31 December 2012 est.)
country comparison to the world: 83

$19.64 billion (31 December 2011 est.)
[see also: Stock of domestic credit country ranks ]

Market value of publicly traded shares:
$2.021 billion (31 December 2011)
country comparison to the world: 98

$1.996 billion (31 December 2010)
$1.128 billion (31 December 2009)
[see also: Market value of publicly traded shares country ranks ]

Current account balance:
$-740 million (2012 est.)
country comparison to the world: 112

$-887 million (2011 est.)
[see also: Current account balance country ranks ]

Exports:
$5.06 billion (2012 est.)
country comparison to the world: 113

$5.344 billion (2011 est.)
[see also: Exports country ranks ]

Exports - commodities:
fish and fish products 40%, aluminum, animal products, ferrosilicon, diatomite

Exports - partners:
Netherlands 30%, Germany 12.9%, UK 9.8%, Norway 5.1%, US 4.5%, France 4.4% (2012)

Imports:
$4.441 billion (2012 est.)
country comparison to the world: 135

$4.506 billion (2011 est.)
[see also: Imports country ranks ]

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

Imports - partners:
Norway 16.6%, US 10.2%, Germany 9.2%, China 7.2%, Brazil 6.7%, Netherlands 6%, Denmark 5.7%, UK 4.6% (2012)

Reserves of foreign exchange and gold:
$4.192 billion (31 December 2012 est.)
country comparison to the world: 99

$8.55 billion (31 December 2011 est.)
[see also: Reserves of foreign exchange and gold country ranks ]

Debt - external:
$100.2 billion (31 December 2012)
country comparison to the world: 48

$110.8 billion (31 December 2011 est.)
[see also: Debt - external country ranks ]

Stock of direct foreign investment - at home:

$9.2 billion (31 December 2008)
[see also: Stock of direct foreign investment - at home country ranks ]

Stock of direct foreign investment - abroad:

$8.8 billion (31 December 2008)
[see also: Stock of direct foreign investment - abroad country ranks ]

Exchange rates:
Icelandic kronur (ISK) per US dollar -

125.08 (2012 est.)
115.95 (2011 est.)
122.24 (2010 est.)
123.64 (2009)
85.619 (2008)


NOTE: The information regarding Iceland on this page is re-published from the 2014 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Iceland Economy 2014 information contained here. All suggestions for corrections of any errors about Iceland Economy 2014 should be addressed to the CIA.



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