Iceland
Republic of IcelandLydveldid Island
parliamentary republic
Iceland as the 2017 edition of the CIA World Factbook published it: 158 fields, one of 36 editions from 1990 to 2025.
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Introduction
1 fieldBackground
Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althingi, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US. Denmark granted limited home rule in 1874 and complete independence in 1944.
The second half of the 20th century saw substantial economic growth driven primarily by the fishing industry. The economy diversified greatly after the country joined the European Economic Area in 1994, but Iceland was especially hard hit by the global financial crisis in the years following 2008. The economy is now on an upward trajectory, fueled primarily by a tourism and construction boom. Literacy, longevity, and social cohesion are first rate by world standards.
Geography
Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the United Kingdom
19 fieldsLocation
Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the United Kingdom
Terrain
mostly plateau interspersed with mountain peaks, icefields; coast deeply indented by bays and fiords
Land use
- agricultural land:
- 18.7%;
- arable land 1.2%;
- permanent crops 0%;
- permanent pasture 17.5%
- forest:
- 0.3%
- other:
- 81% (2011 est.)
Population - distribution
- Iceland is almost entirely urban with half of the population located in and around the capital of Reykjavik;
- smaller clusters are primarily found along the coast in the north and west
Natural hazards
earthquakes and volcanic activity
- volcanism:
- Iceland, situated on top of a hotspot, experiences severe volcanic activity;
- Eyjafjallajokull (1,666 m) erupted in 2010, sending ash high into the atmosphere and seriously disrupting European air traffic;
- scientists continue to monitor nearby Katla (1,512 m), which has a high probability of eruption in the very near future, potentially disrupting air traffic;
- Grimsvoetn and Hekla are Iceland's most active volcanoes;
- other historically active volcanoes include
Environment - international agreements
- party to:
- Air Pollution, Air Pollution-Persistent Organic Pollutants, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Kyoto Protocol, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Transboundary Air Pollution, Wetlands, Whaling
- signed, but not ratified:
- Environmental Modification, Marine Life Conservation
Geography - note
- strategic location between Greenland and Europe;
- westernmost European country;
- Reykjavik is the northernmost national capital in the world;
- more land covered by glaciers than in all of continental Europe
People and Society
33 fieldsAge structuremale left, female right · (2017 est.)
Per 1,000 population(2017 est.)
Male · female
Religions(2017 est.)
Ethnic groups
homogeneous mixture of descendants of Norse and Celts 94%, population of foreign origin 6%
Population distribution
- Iceland is almost entirely urban with half of the population located in and around the capital of Reykjavik;
- smaller clusters are primarily found along the coast in the north and west
Sex ratio
- at birth:
- 1.05 male(s)/female
- 0-14 years:
- 1.05 male(s)/female
- 15-24 years:
- 1.03 male(s)/female
- 25-54 years:
- 1.02 male(s)/female
- 55-64 years:
- 1.01 male(s)/female
- 65 years and over:
- 0.88 male(s)/female
- total population:
- 1.01 male(s)/female (2016 est.)
Government
Parliamentary republic; President Gudni Thorlacius JOHANNESSON (since 1 August 2016); Acting Prime Minister Bjarni BENEDIKTSSON (since 11 January 2017)
21 fieldsPresidential electionpercent of vote
Althingi or Parliament, 63 seats, elected 29 October 2016one dot, one seat
Percent of vote
Country name
- conventional long form:
- Republic of Iceland
- conventional short form:
- Iceland
- local long form:
- Lydveldid Island
- local short form:
- Island
- etymology:
- Floki VILGERDARSON, an early explorer of the island (9th century), applied the name "Land of Ice" after spotting a fjord full of drift ice to the north and spending a bitter winter on the island;
- he eventually settled on the island, however, after he saw how it greened up in the summer and that it was, in fact, habitable
Capital
- name:
- Reykjavik
- geographic coordinates:
- 64 09 N, 21 57 W
- time difference:
- UTC 0 (5 hours ahead of Washington, DC, during Standard Time)
Administrative divisions
8 regions; Austurland, Hofudhborgarsvaedhi, Nordhurland Eystra, Nordhurland Vestra, Sudhurland, Sudhurnes, Vestfirdhir, Vesturland
Independence
- 1 December 1918 (became a sovereign state under the Danish Crown);
- 17 June 1944 (from Denmark; birthday of Jon SIGURDSSON, leader of Iceland's 19th Century independence movement)
Constitution
- history:
- several previous; latest ratified 16 June 1944, effective 17 June 1944 (at independence)
- amendments:
- proposed by the Althingi;
- passage requires approval by the Althingi and by the next elected Althingi, and confirmation by the president of the republic;
- proposed amendments to Article 62 of the constitution – that the Evangelical Lutheran Church shall be the state church of Iceland – also require passage by referendum;
- amended many times, last in 2013 (2016)
International law organization participation
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Citizenship
- citizenship by birth:
- no
- citizenship by descent only:
- at least one parent must be a citizen of Iceland
- dual citizenship recognized:
- yes
- residency requirement for naturalization:
- 3 to 7 years
Executive branch
- chief of state:
- President Gudni Thorlacius JOHANNESSON (since 1 August 2016)
- head of government:
- Acting Prime Minister Bjarni BENEDIKTSSON (since 11 January 2017); Prime Minister BENEDIKTSSON resigned on 16 September 2017
- cabinet:
- Cabinet appointed by the prime minister
- elections/appointments:
- president directly elected by simple majority popular vote for a 4-year term (no term limits);
- election last held on 25 June 2016 (next to be held in June 2020);
- following legislative elections, the leader of the majority party or majority coalition becomes prime minister
- election results:
- Gudni Thorlacius JOHANNESSON elected president;
- percent of vote - Gudni Thorlacius JOHANNESSON (IP) 39.1%, Halla TOMASDOTTIR (independent) 27.9%, Andri Snaer MAGNASON (independent) 14.3%, David ODDSSON (IP) 13.7%, Sturla JONSSON (Sturla Jonsson) 3.5%, invalid 1.5%
Legislative branch
- description:
- unicameral Althingi or Parliament (63 seats; members directly elected in multi-seat constituencies by proportional representation vote to serve 4-year terms)
- elections:
- last held on 29 October 2016 (next to be held on 28 October 2017); note - an early election is being held because the governing coalition collapsed
- election results:
- percent of vote by party - IP 29.0%, LGM 15.9%, PIP 14.5%, PP 11.5%, Reform 10.5%, BF 7.2%, SDA 5.7%, PP 3.5%;
- other 2.2%;
- seats by party - IP 21, LGM 10, PIP 10, PP 8, Reform 7, BF 4, SDA 3
Judicial branch
- highest court(s):
- Supreme Court or Haestirettur (consists of 9 judges)
- judge selection and term of office:
- judges proposed by Ministry of Interior selection committee and appointed by the president; judges appointed for an indefinite period
- subordinate courts:
- 8 district courts; Labor Court
Political parties and leaders
- Bright Future (Bjort framtid) or BF [Ottarr PROPPE]
- Independence Party (Sjalfstaedisflokkurinn) or IP [Bjarni BENEDIKTSSON]
- Left-Green Movement (Vinstrihreyfingin-graent frambod) or LGM [Katrin JAKOBSDOTTIR]
- Pirate Party (Piratar) or PIP [Birgitta JONSDOTTIR]
- Progressive Party (Framsoknarflokkurinn) or PP [Sigurdur Ingi JOHANNSSON]
- Reform (Vidreisn) or R [Benedict JOHANNSSON]
- Social Democratic Alliance (Samfylkingin) or SDA [Logi Mar EINARSSON]
- Sturla Jonsson (formerly Move Forward Party [Sturla JONSSON, chairman]
International organization participation
Arctic Council, Australia Group, BIS, CBSS, CD, CE, EAPC, EBRD, EFTA, FAO, FATF, IAEA, IBRD, ICAO, ICC (national committees), ICCt, ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC (NGOs), MIGA, NATO, NC, NEA, NIB, NSG, OAS (observer), OECD, OPCW, OSCE, PCA, Schengen Convention, UN, UNCTAD, UNESCO, UPU, WCO, WHO, WIPO, WMO, WTO
Diplomatic representation in the US
- chief of mission:
- Ambassador Geir Hilmar HAARDE (since 23 February 2015)
- chancery:
- House of Sweden, 2900 K Street NW
- telephone:
- [1] (202) 265-6653
- FAX:
- [1] (202) 265-6656
- consulate(s) general:
- New York
Diplomatic representation from the US
- chief of mission:
- Ambassador (vacant); Charge d'Affaires Jill ESPOSITO (since 20 January 2017)
- embassy:
- Laufasvegur 21, 101 Reykjavik
- mailing address:
- US Department of State, 5640 Reykjavik Place, Washington, D.C. 20521-5640
- telephone:
- [354] 595-22-00
- FAX:
- [354] 562-9118
Flag description
- blue with a red cross outlined in white extending to the edges of the flag;
- the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag);
- the colors represent three of the elements that make up the island: red is for the island's volcanic fires, white recalls the snow and ice fields of the island, and blue is for the surrounding ocean
National anthem
- name:
- "Lofsongur" (Song of Praise)
- lyrics/music:
- Matthias JOCHUMSSON/Sveinbjorn SVEINBJORNSSON
note: adopted 1944; also known as "O, Gud vors lands" (O, God of Our Land), the anthem was originally written and performed in 1874
Economy
Iceland's economy combines a capitalist structure and free-market principles with an extensive welfare system.
41 fieldsGDP - composition, by sector of origin(2016 est.)
Trading partnersexports left, imports right
By end use% of GDP
Economy - overview
Iceland's economy combines a capitalist structure and free-market principles with an extensive welfare system. Except for a brief period during the 2008 crisis, Iceland has achieved high growth, low unemployment, and a remarkably even distribution of income. The economy depends heavily on the fishing industry, which provides 40% of merchandise 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. Since 2010, tourism has become the main pillar of Icelandic economic growth, with the number of tourists reaching 4.5 times the Icelandic population in 2016.
Iceland's economy has been diversifying into manufacturing and service industries in the last decade, particularly within the fields of tourism, software production, and biotechnology. In fall 2013, the Icelandic Government approved a joint application by Icelandic, Chinese, and Norwegian energy firms to conduct oil exploration off Iceland’s northeast coast, although no exploration has yet taken place.
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.
Following the privatization of the banking sector in the early 2000s, domestic banks expanded aggressively in foreign markets, and consumers and businesses borrowed heavily in foreign currencies. 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. Three new banks were established to take over the domestic assets of the collapsed banks. Two of them have majority ownership by the state, which intends to re-privatize them.
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.
Capital controls were finally lifted in March 2017, but some financial protections (e.g., reserve requirements for specified investments connected to new inflows of foreign currency) remain in place. Iceland’s financial woes prompted an initial increase in public support to join the EU and the euro zone, with accession negotiations beginning in July 2010, but negotiations were suspended under the center-right government that took power in 2013.
The current ruling coalition does not intend to restart accession talks, but has signaled that it would allow a vote on the question of EU membership, if a bill came before parliament near the end of the current parliamentary term. Most macroeconomic indicators and employment have rebounded to pre-crisis levels, driven primarily by the unprecedented growth in tourism – averaging over 20% annually – following the well-publicized volcanic eruption in 2010.
Gross national saving
29.3% of GDP (2016 est.) · 24.5% of GDP (2015 est.) · 21.3% of GDP (2014 est.) country comparison to the world: 26
Agriculture - products
- potatoes, carrots, green vegetables, tomatoes, cucumbers;
- mutton, chicken, pork, beef, dairy products;
- fish
Industries
- tourism, fish processing;
- aluminum smelting;;
- geothermal power, hydropower;
- medical/pharmaceutical products
Distribution of family income - Gini index
28 (2006) · 25 (2005) country comparison to the world: 135
Central bank discount rate
5.4% (31 January 2012) · 5.75% (31 December 2010) country comparison to the world: 77
Commercial bank prime lending rate
8.24% (31 December 2016 est.) · 7.61% (31 December 2015 est.) country comparison to the world: 103
Stock of narrow money
$4.251 billion (31 December 2016 est.) · $3.314 billion (31 December 2015 est.) country comparison to the world: 108
Stock of broad money
$8.693 billion (31 December 2015 est.) · $7.471 billion (31 December 2015 est.) country comparison to the world: 107
Stock of domestic credit
$21.18 billion (31 December 2016 est.) · $18.43 billion (31 December 2015 est.) country comparison to the world: 86
Current account balance
$1.589 billion (2016 est.) · $918 million (2015 est.) country comparison to the world: 37
Exports - commodities
fish and fish products (42%), aluminum (38%), agricultural products, medicinal and medical products, ferro-silicon (2015)
Reserves of foreign exchange and gold
$7.226 billion (31 December 2016 est.) · $5.041 billion (31 December 2015 est.) country comparison to the world: 81
Debt - external
$25.02 billion (31 December 2016 est.) · $30.25 billion (31 December 2015 est.) country comparison to the world: 85
Stock of direct foreign investment - at home
$13.89 billion (31 December 2016 est.) · $16.26 billion (31 December 2015 est.) country comparison to the world: 90
Stock of direct foreign investment - abroad
$17.64 billion (31 December 2016 est.) · $16.47 billion (31 December 2015 est.) country comparison to the world: 54
Exchange rates
Icelandic kronur (ISK) per US dollar - 129.3 (2016 est.) · 131.92 (2015 est.) · 131.92 (2014 est.) · 116.77 (2013 est.) · 125.08 (2012 est.)
Energy
24 fieldsElectrification% of population · (2016)
Installed generating capacity, 2.772 million kW(2015 est.)
Carbon dioxide emissions from consumption of energy
3.3 million Mt (2013 est.) country comparison to the world: 141
Communications
6 fieldsPer 100 inhabitants(July 2016 est.)
Telephone system
- general assessment:
- telecommunications infrastructure is modern and fully digitized, with satellite-earth stations, fiber-optic cables, and an extensive broadband network
- domestic:
- liberalization of the telecommunications sector beginning in the late 1990s has led to increased competition especially in the mobile services segment of the market
- international:
- country code - 354;
- the CANTAT-3 and FARICE-1 submarine cable systems provide connectivity to Canada, the Faroe Islands, UK, Denmark, and Germany;
- a planned new section of the Hibernia-Atlantic submarine cable will provide additional connectivity to Canada, US, and Ireland;
- satellite earth stations - 2 Intelsat (Atlantic Ocean), 1 Inmarsat (Atlantic and Indian Ocean regions);
- note - Iceland shares the Inmarsat earth station with the other Nordic countries (Denmark, Finland, Norway, and Sweden) (2015)
Broadcast media
- state-owned public TV broadcaster operates 1 TV channel nationally;
- several privately owned TV stations broadcast nationally and roughly another half-dozen operate locally;
- about one-half the households utilize multi-channel cable or satellite TV services;
- state-owned public radio broadcaster operates 2 national networks and 4 regional stations;
- 2 privately owned radio stations operate nationally and another 15 provide more limited coverage (2007)
Transportation
8 fieldsAirports by runway lengthpaved left, unpaved right
National air transport system
- number of registered air carriers:
- 5; inventory of registered aircraft operated by air carriers: 43
- annual passenger traffic on registered air carriers:
- 3,413,950
- annual freight traffic on registered air carriers:
- 102,356,809 mt-km (2015)
Roadways
- total:
- 12,890 km
- paved/oiled gravel:
- 4,782 km (excludes urban roads)
- unpaved:
- 8,108 km (2012)
country comparison to the world: 127
Merchant marine
- total:
- 2
- by type:
- passenger/cargo 2
- registered in other countries:
- 19 (Antigua and Barbuda 10, Belize 1, Faroe Islands 4, Finland 1, Gibraltar 1, Norway 2) (2010)
country comparison to the world: 142
Military and Security
No regular military forces; Icelandic National Police; Icelandic Coast Guard (2016)
3 fieldsMilitary branches
- no regular military forces;
- Icelandic National Police;
- Icelandic Coast Guard (2016)
Military - note
- Iceland is the only NATO member that has no standing military force;
- all US military forces in Iceland were withdrawn as of October 2006;
- defense of Iceland remains a NATO commitment and NATO maintains an air policing presence in Icelandic airspace;
- Iceland participates in international peacekeeping missions with the civilian-manned Icelandic Crisis Response Unit (ICRU)
Transnational Issues
2 fieldsDisputes - international
- Iceland, the UK, and Ireland dispute Denmark's claim that the Faroe Islands' continental shelf extends beyond 200 nm;
- the European Free Trade Association Surveillance Authority filed a suit against Iceland, claiming the country violated the Agreement on the European Economic Area in failing to pay minimum compensation to Icesave depositors
Cite this entry
Central Intelligence Agency. “Iceland.” The World Factbook 2017. Archived by The Factbook, thefactbook.org/iceland/2017.