Economy - overviewIceland'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 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. The 2006 closure of the US military base at Keflavik had very little impact on the national economy; Iceland's low unemployment rate aided former base employees in finding alternate employment. GDP (purchasing power parity)$11.89 billion (2007 est.) GDP (official exchange rate)$19.52 billion (2007 est.) GDP - real growth rate1.8% (2007 est.) GDP - per capita (PPP)$39,400 (2007 est.) GDP - composition by sectoragriculture: 5.3% Population below poverty lineNA% Household income or consumption by percentage sharelowest 10%: NA% Inflation rate (consumer prices)4.9% (2007 est.) Investment (gross fixed)25.5% of GDP (2007 est.) Labor force180,000 (2007 est.) Labor force - by occupationagriculture: 5.1% Unemployment rate1% (2007 est.) Distribution of family income - Gini index25 (2005) Budgetrevenues: $9.495 billion Public debt27.7% of GDP (2007 est.) Industriesfish processing; aluminum smelting, ferrosilicon production; geothermal power, tourism Industrial production growth rate9% (2007 est.) Electricity - production8.533 billion kWh (2005) Electricity - consumption8.152 billion kWh (2005) Electricity - exports0 kWh (2005) Electricity - imports0 kWh (2005) Oil - production0 bbl/day (2005 est.) Oil - consumption18,460 bbl/day (2005 est.) Oil - imports17,450 bbl/day (2004) Oil - exports0 bbl/day (2004) Oil - proved reserves0 bbl (1 January 2006 est.) Natural gas - production0 cu m (2005 est.) Natural gas - consumption0 cu m (2005 est.) Natural gas - exports0 cu m (2005 est.) Natural gas - imports0 cu m (2005) Natural gas - proved reserves0 cu m (1 January 2006 est.) Current Account Balance-$3.384 billion (2007 est.) Agriculture - productspotatoes, green vegetables; mutton, dairy products; fish Exports$4.569 billion f.o.b. (2007 est.) Exports - commoditiesfish and fish products 70%, aluminum, animal products, ferrosilicon, diatomite Exports - partnersNetherlands 16.5%, UK 15.7%, Germany 15%, US 10.8%, Spain 6.4% (2006) Imports$5.777 billion (2007 est.) Imports - commoditiesmachinery and equipment, petroleum products, foodstuffs, textiles Imports - partnersUS 12.8%, Germany 12.3%, Norway 7.1%, Sweden 6.9%, Denmark 6.1%, UK 5.3%, China 5.3%, Netherlands 4.8%, Japan 4.1% (2006) Reserves of foreign exchange and gold$2.436 billion (31 December 2007 est.) Debt - external$3.073 billion (2002) Stock of direct foreign investment - at home$NA Stock of direct foreign investment - abroad$NA Market value of publicly traded shares$27.8 billion (2005) Economic aid - donor$6.7 million (2004) Currency (code)Icelandic krona (ISK) Exchange ratesIcelandic kronur per US dollar - 63.391 (2007), 70.195 (2006), 62.982 (2005), 70.192 (2004), 76.709 (2003) Fiscal yearcalendar year |
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Source: CIA World Factbook | |