Economic overview Iceland, in 36 editions.

Iceland's prosperous Scandinavian-type economy is basically capitalistic, but with extensive welfare measures, low unemployment, and comparatively even distribution of income. The economy is heavily dependent on the fishing industry, which provides nearly 75% of export earnings. In the absence of other natural resources, Iceland's economy is vulnerable to changing world fish prices. National output declined for the second consecutive year in 1989, and two As a result of the largest climbing fish farms filed for bankruptcy. Other economic activities include livestock raising and aluminum smelting. A fall prices in the fish catch 1990 and a noninflationary labor agreement, Iceland is expected for 1990, resulting pulling out of a recession, which began in mid-1988 with a continuation sharp decline in fish prices and an imposition of the recession. quotas on fish catches to conserve stocks. Inflation was down sharply from 20% in 1989 to 8% in 1990.

Iceland's prosperous Scandinavian-type economy is basically capitalistic,
but with extensive welfare measures, low unemployment, and comparatively
even distribution of income. The economy is heavily dependent on the fishing
industry, which provides nearly 75% of export earnings. In the absence of
other natural resources, Iceland's economy is vulnerable to changing world
fish prices. As a result of The economic improvements resulting from climbing fish prices
in 1990 and a noninflationary labor agreement, Iceland is pulling out of a recession, which began in mid-1988 with a sharp decline in agreement probably will be reversed by
tighter fish prices quotas and an imposition a delay in the construction of quotas on fish catches an aluminum smelting
plant. The conservative government's economic priorities include reducing
the budget and current account deficits, containing inflation, revising
agricultural and fishing policies, diversifying the economy, and tying the
krona to conserve stocks. the EC's European currency unit in 1993. The fishing industries -
notably the shrimp industry - are experiencing a series of bankruptcies and
mergers. Inflation was down has continued to drop sharply from 20% in 1989 to 8% about
7.5% in 1990. 1991 and possibly 3% in 1992, while unemployment is expected to
increase to 2.5%. GDP is expected to contract by nearly 4% in 1992.

Iceland's prosperous Scandinavian-type economy is basically capitalistic,
but with an
extensive welfare measures, system, relatively low unemployment, and comparatively
even distribution of income. The economy is heavily dependent on the fishing
industry, which provides nearly 75% of export earnings. earnings and employs 12% of
the workforce. In the absence of
other natural resources, resources - except energy -
Iceland's economy is vulnerable to changing world
fish prices. Iceland's
economy has been in recession since 1988. The economic improvements resulting from climbing fish prices recession deepened in 1992 due
to severe cutbacks in 1990 fishing quotas and a noninflationary labor agreement probably will be reversed by falling world prices for the
tighter country's main exports: fish quotas and a delay fish products, aluminum, and ferrosilicon.
Real GDP declined 3.3% in the construction of an aluminum smelting 1992 and is forecast to contract another 1.5% in
plant. 1993. The conservative center-right government's economic priorities goals include reducing
the
budget and current account deficits, limiting foreign borrowing, containing
inflation, revising
agricultural and fishing policies, diversifying the
economy, and tying privatizing state-owned industries. The recession has led to a
wave of bankruptcies and mergers throughout the economy, as well as the
krona to highest unemployment of the EC's European currency unit in 1993. post-World War II period. The fishing industries - national
notably unemployment rate reached 5% in early 1993, with some parts of the shrimp industry - are country
experiencing unemployment in the 9-10% range. Inflation, previously a series of bankruptcies and
mergers. Inflation has continued to drop sharply serious problem, declined from 20% in 1989 to about
7.5% in 1991 and possibly 3% double digit rates in 1992, while unemployment is expected the 1980s to only 3.7%
increase to 2.5%. GDP is expected to contract by nearly 4% in 1992.

Iceland's Scandinavian-type economy is basically capitalistic, but
with an
extensive welfare system, relatively low unemployment, and comparatively
comparatively even distribution of income. The economy is heavily
dependent on the fishing
industry, which provides nearly 75% of export
earnings and employs 12% of
the workforce. In the absence of other
natural resources - except energy -
Iceland's economy is vulnerable to
changing world fish prices. Iceland's
economy has been in recession
since 1988. The recession deepened continued in 1992 1993 due
to severe a third year of
cutbacks in fishing quotas and as well as falling world prices for the
country's main exports: fish and fish products, aluminum, and ferrosilicon.
ferrosilicon. Real GDP declined 3.3% in 1992 and is forecast to contract another 1.5% in rose slightly, by
0.4%, in 1993. The center-right government's economic goals 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 recession has led to a
wave of bankruptcies and
mergers throughout the economy, as well as the
highest unemployment of
the post-World War II period. The national
unemployment rate reached 5% in early 1993, with some parts of the country
experiencing unemployment in the 9-10% range. Inflation, previously a
serious problem,
declined from double digit rates in the 1980s to only 3.7%
in 1992. 1992-93.

Iceland's Scandinavian-type economy is basically
capitalistic, but
with an extensive welfare system, relatively low
unemployment, and
comparatively even distribution of income. The
economy is heavily
dependent on the fishing industry, which provides
nearly 75% of export
earnings and employs 12% of the workforce. work force. In
the absence of other
natural resources - except energy - Iceland's
economy is vulnerable to
changing world fish prices. Iceland's economy has been The economy, in recession
since 1988. The recession continued in 1993 due since 1988, began to a third year of recover in 1993, posting 0.4% growth,
but was still hampered by cutbacks in fishing fish quotas as well as falling
world prices for the
country's its main exports: fish and fish products, aluminum, and
and ferrosilicon. Real GDP declined 3.3% in 1992 and rose slightly, grew by
0.4%, perhaps 2.4% in 1993. 1994. The center-right government's economic goals include
center-right government plans to continue its policies of 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 recession has led to a wave of bankruptcies and
mergers throughout the economy, as well as government, however, remains divided on the highest unemployment issue of EU membership,
the post-World War II period. Inflation, previously a serious problem, primarily because of Icelanders' concern about losing control over
declined from double digit rates in the 1980s to only 3.7% in 1992-93. their fishing resources.

Iceland's Scandinavian-type economy is basically
basically capitalistic, but with an extensive welfare system, relatively low
unemployment, and comparatively even distribution of income. The
economy is heavily dependent on the fishing industry, which provides
nearly 75% of export earnings and employs 12% of the work force. In
the absence of other natural resources - except energy - Iceland's
economy is vulnerable to changing world fish prices. The economy, in
recession since 1988, began to recover in 1993, posting 0.4% growth,
but was still hampered by cutbacks in fish quotas as well as falling
world prices for its main exports: fish and fish products, aluminum,
and ferrosilicon. Real GDP grew by perhaps 2.4% in 1994. The
center-right government plans to continue its
policies of 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, however, remains
divided on the issue of EU membership,
primarily because of
Icelanders' concern about losing control over
their fishing
resources.

Iceland's Scandinavian-type economy is
basically
capitalistic, but yet with an extensive welfare system, low
unemployment,
and comparatively remarkably even distribution of income. The
economy is depends
heavily dependent on the fishing industry, which provides
nearly 75% of export earnings
and employs 12% of the work force. In
the absence of other natural
resources - except energy - Iceland's
economy is vulnerable to
changing world fish prices. The economy, in
recession since 1988, began economy remains sensitive to recover in 1993, posting 0.4% growth, declining
but was still hampered by cutbacks in fish quotas stocks as well as falling
to drops in world prices for its main exports:
fish and fish products, aluminum,
and ferrosilicon. The center-right
government plans to continue its
policies of 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, however, remains government
divided on the issue of remains opposed to EU membership, primarily because of
Icelanders'
concern about losing control over their fishing
resources.

Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system, low unemployment,
and remarkably even distribution of income. The economy depends
heavily on the fishing industry, which provides 75% of export earnings
and employs 12% of the work force. In the absence of other natural
resources - except energy - Iceland's resources-except energy-Iceland's economy is vulnerable to
changing
world fish prices. The economy remains sensitive to declining
fish
stocks as well as to drops in world prices for its main exports:
fish
and fish products, aluminum, and ferrosilicon. The center-right
government plans to continue its policies of 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. Growth is
likely to slow in 1998, to a still respectable 3.9%.

Iceland's Scandinavian-type economy is basically
basically capitalistic, yet with an extensive welfare system, low unemployment,
unemployment, and remarkably even distribution of income. The
economy depends
heavily on the fishing industry, which provides 75%
of export earnings
and employs 12% of the work force. In the absence
of other natural
resources-except energy-Iceland's resources--except energy--Iceland's economy is
vulnerable to changing
world fish prices. The economy remains
sensitive to declining fish
stocks as well as to drops in world
prices for its main exports: fish
and fish products, aluminum, and
ferrosilicon. The center-right
government plans to continue its
policies of 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. Growth 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 is likely to slow in 1998, 1999, to a still
respectable 3.9%. 4.6%.

Iceland's Scandinavian-type economy is
basically capitalistic, yet with an extensive welfare system, low
unemployment, and remarkably even distribution of income. The
economy depends heavily on the fishing industry, which provides 75%
70% of export earnings and employs 12% of the work force. In the absence
of other natural resources--except energy--Iceland's resources (except for abundant hydrothermal and geothermal power), Iceland's economy is
vulnerable to changing world fish prices. The economy remains
sensitive to declining fish stocks as well as to drops in world
prices for its main exports: fish and fish products, aluminum, and
ferrosilicon. The center-right government plans to continue its
policies of 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 is likely to slow in 1999, 2000, to a still
respectable 4.6%. 3.5%.

Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system, low unemployment, and remarkably even distribution of income. The In the absence of other natural resources (except for abundant hydrothermal and geothermal power), the economy depends heavily on the fishing industry, which provides 70% of export earnings and employs 12% of the work force. In the absence of other natural resources (except for abundant hydrothermal and geothermal power), Iceland's economy is vulnerable to changing world fish prices. The economy remains sensitive to declining fish stocks as well as to drops in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. The center-right government plans to continue its policies of 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. whale watching. Growth is likely to slow in 2000, to a still respectable 3.5%. has been remarkably steady over the past five years at 4%-5%.

Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system, low unemployment, and remarkably even distribution of income. In the absence of other natural resources (except for abundant hydrothermal and geothermal power), the economy depends heavily on the fishing industry, which provides providing 70% of export earnings and employs employing 12% of the work force. The economy remains sensitive to declining fish stocks as well as to drops in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. The center-right government plans to continue its policies of 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 has been remarkably steady over the past five years at 4%-5%. Consumption, investment, and exports should recover moderately in 2003.

Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system, system (including generous housing subsidies), low unemployment, and remarkably even distribution of income. In the absence of other natural resources (except for abundant hydrothermal and geothermal power), the economy depends heavily on the fishing industry, providing which provides 70% of export earnings and employing employs 12% of the work force. The economy remains sensitive to declining fish stocks as well as to drops fluctuations in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. The center-right government plans to continue its Government policies of 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. Consumption, investment, and exports should recover moderately Growth had been remarkably steady in 2003. 1996-2001 at 3%-5%, but could not be sustained in 2002 in an environment of global recession. Growth resumed in 2003, and inflation dropped back from 5% to 2%.

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 hydrothermal and geothermal power), the economy depends heavily on the fishing industry, which provides 70% of export earnings and employs 12% 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 inflation dropped back from 5% to 2%.

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 12% 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 inflation dropped back from 5% to 2%. estimates call for strong growth until 2007, slowly dropping until the end of the decade.

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% 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 budget and current account deficits, deficit, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, and diversifying the economy, and privatizing state-owned industries. 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.

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 4% 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. Growth had been remarkably steady in 1996-2001 at 3%-5%, but could not be sustained Since 2000 growth has varied from -1% in 2002 to 8% in an environment 2004. The 2006 closure of global recession. Growth resumed in 2003, and estimates call for strong growth until 2007, slowly dropping until the end of US military base at Keflavik had very little impact on the decade. national economy; Iceland's low unemployment rate aided former base employees in finding alternate employment.

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. Substantial foreign investment in the aluminum and hydropower sectors has boosted economic growth which, nevertheless, has been volatile and characterized by recurrent imbalances. 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.

Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system, including generous housing subsidies. system. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income. Government economic priorities have included stabilizing the krona, reducing the current account deficit, containing inflation, restructuring the financial sector, and diversifying the economy. The economy depends heavily on the fishing industry, which provides 40% of export earnings, more than 12% of GDP, and employs 7% 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, with new developments in particularly within the fields of software production, biotechnology, and tourism. Abundant geothermal and hydropower sources have attracted substantial foreign investment in the aluminum and hydropower sectors sector and boosted economic growth, 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-currency loans, 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 negotiated secured over $10 billion in loans from the IMF and other countries to stabilize its currency and financial sector, and to guarantee back government guarantees for foreign deposits in Icelandic banks. A protracted recession is expected in 2009 and 2010 with GDP likely to contract fell 6.8% in 2009, and unemployment likely to surpass 10%. The peaked at 9.4% in February 2009. GDP fell 3.4% in 2010. Since the collapse of Iceland's financial sector, government economic priorities have included: stabilizing the krona, reducing Iceland's high budget deficit, containing inflation, restructuring the financial system has led 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 major shift in opinion in favor majority of joining the EU shares of the third. British and adopting Dutch authorities have pressed claims totaling over $5 billion against Iceland to compensate their citizens for losses suffered on deposits held in the euro. Previous opposition failed Icelandic bank, Landsbanki Islands. Iceland agreed to this move stemmed from Icelanders' new terms with the UK and the Netherlands to compensate British and Dutch depositors, but the agreement must first be approved by the Icelandic President. Iceland began EU accession negotiations with the EU in July 2010, however, public support has dropped substantially because of concern about losing control of their fishing resources. Iceland's coalition government collapsed in January 2009 following protests over growing joblessness fishing resources and losses in reaction to personal savings. measures taken by Brussels during the ongoing Eurozone crisis.

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 7% 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 and boosted economic growth, 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 fell 3.4% in 2010. Since the collapse of Iceland's financial sector, government economic priorities have included: stabilizing the krona, reducing Iceland's high budget deficit, containing inflation, 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. British and Dutch authorities have pressed claims totaling over $5 billion against Iceland to compensate their citizens for losses suffered on deposits held in the failed Icelandic bank, Landsbanki Islands. Iceland agreed to new terms with the UK and the Netherlands to compensate British and Dutch depositors, but the agreement must first be approved by the Icelandic President. Iceland began EU accession negotiations with the EU in July 2010, 2010; however, public support has dropped substantially because of concern about losing control over fishing resources and in reaction to measures taken by Brussels during the ongoing Eurozone crisis.

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 7% 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 and 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 fell 3.4% rose 2.7% in 2010. 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. British and Dutch authorities have pressed claims totaling over $5 billion against Iceland began making payments to compensate their citizens for losses suffered on deposits held in 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 bank, Landsbanki Islands. banks. Iceland agreed to new terms with the UK owes British and the Netherlands to compensate Dutch authorities approximately $5.5 billion for compensating British and Dutch depositors, but the agreement must first be approved by the Icelandic President. 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 measures taken by Brussels during worries over the ongoing Eurozone crisis.

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 7% 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.

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. 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. 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 2010, but decided in mid-2013 to suspend negotiations with the EU because of concern about losing control over fishing resources and in reaction to worries over the ongoing Eurozone crisis.

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. 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. 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 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. 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 claim Iceland owes approximately $5.5 $6.5 billion for compensating British and Dutch citizens who lost deposits in Icesave savings accounts when parent bank Landsbanki failed in 2008. Iceland began accession negotiations with Iceland’s financial woes prompted an initial increase in public support to join the EU and the Eurozone, with accession negotiations beginning in July 2010, but decided in mid-2013 to suspend negotiations with 2010. However, the EU because election of concern about losing control over fishing resources a new center-right government and worries over declining public support amidst the ongoing Eurozone crisis. crisis led to the suspension of negotiations in mid-2013.

Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system. Prior to Except for a brief period during the 2008 crisis, Iceland had 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 expected to reach or exceed 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, biotechnology, and tourism. biotechnology. In fall 2013, the Icelandic government Government approved a joint application by Icelandic, Chinese Chinese, and Norwegian energy firms to conduct oil exploration off Iceland’s northeast coast. 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. Much of Iceland's economic growth in recent years came as
Following the result privatization of a boom in domestic demand, following the rapid expansion of banking sector in the country's financial sector. Domestic early 2000s, 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. 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: 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. British and Dutch authorities claim Iceland owes approximately $6.5 billion for compensating British and Dutch citizens who lost deposits in Icesave savings accounts when parent bank Landsbanki failed in 2008. Iceland’s financial woes prompted an initial increase in public support to join the EU and the Eurozone, euro zone, with accession negotiations beginning in July 2010. However, 2010, but negotiations were suspended under the election of a new 2013 center-right government government. Most macroeconomic indicators and declining public support amidst the ongoing Eurozone crisis led employment have rebounded to pre-crisis levels, driven primarily by the suspension of negotiations unprecedented growth in mid-2013. tourism – averaging over 20% annually – following the well publicized volcanic eruption in 2010.

Iceland's Scandinavian-type social-market 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 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 expected to reach or exceed 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, 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 2013 center-right government. 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 well-publicized volcanic eruption in 2010.

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 in recent years 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 energy. Tourism, aluminum smelting, and fishing are the financial crisis has put several investment projects pillars of the economy. For decades the Icelandic economy depended heavily on hold.
fisheries, but tourism has now surpassed fishing and aluminum as Iceland’s main export industry. Tourism accounted for 8.6% of Iceland’s GDP in 2016, and 39% of total exports of merchandise and services. From 2010 to 2017, the number of tourists visiting Iceland increased by nearly 400%. Since 2010, tourism has become a main driver of Icelandic economic growth, with the number of tourists reaching 4.5 times the Icelandic population in 2016. Iceland remains sensitive to fluctuations in world prices for its main exports, and to fluctuations in the exchange rate of the Icelandic Krona. 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 nearly nine 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., protections, such as reserve requirements for specified investments connected to new inflows of foreign currency) 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.

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 in recent years achieved high growth, low unemployment, and a remarkably even distribution of income. 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. 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.
Tourism, aluminum smelting, and fishing are the pillars of the economy. For decades the Icelandic economy depended heavily on fisheries, but tourism has now surpassed fishing and aluminum as Iceland’s main export industry. Tourism accounted for 8.6% of Iceland’s GDP in 2016, and 39% of total exports of merchandise and services. From 2010 to 2017, the number of tourists visiting Iceland increased by nearly 400%. Since 2010, tourism has become a main driver of Icelandic economic growth, with the number of tourists reaching 4.5 times the Icelandic population in 2016. Iceland remains sensitive to fluctuations in world prices for its main exports, and to fluctuations in the exchange rate of the Icelandic Krona.
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 nearly nine times the country's GDP, became unsustainable. Iceland's three largest banks collapsed in late 2008. 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 lifted in March 2017, but some financial protections, such as reserve requirements for specified investments connected to new inflows of foreign currency, remain in place.

high-income north North Atlantic island economy; non-EU not an EU member but market integration via European Economic Area (EEA); dominant tourism, fishing, and aluminum industries vulnerable to demand swings and disruption from volcanic activity; inflation remains above target rate; barriers to foreign business access and economic diversification