Iceland Economy 2010

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, with new developments in software production, biotechnology, and tourism. Abundant geothermal sources have attracted substantial foreign investment in the aluminum and hydropower sectors 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, following the privatization of the 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 6.3% in 2009, and unemployment rose to 8.8%. GDP growth is expected to be near zero in 2010 and unemployment likely to surpass 10%. Since the collapse of Iceland's financial sector, government economic priorities include stabilizing the krona, reducing its high budget deficit, containing inflation, restructuring the financial sector, and diversifying the economy. The collapse of the financial system initially led to a major shift in opinion in favor of joining the EU and adopting the euro, although support has dropped substantially because of concern about losing control of their fishing resources and reaction to measures taken by EU partners following the financial crisis.

GDP (purchasing power parity):
$12.2 billion (2009 est.)

$13.02 billion (2008 est.)

$12.85 billion (2007 est.)
note: data are in 2009 US dollars
[see also: GDP (purchasing power parity) country ranks ]
GDP (official exchange rate):
$11.78 billion (2009 est.)
[see also: GDP (official exchange rate) country ranks ]

GDP - real growth rate:
-6.3% (2009 est.)

1.3% (2008 est.)

5.5% (2007 est.)
[see also: GDP - real growth rate country ranks ]
GDP - per capita (PPP):
$39,800 (2009 est.)

$42,800 (2008 est.)

$42,600 (2007 est.)
note: data are in 2009 US dollars
[see also: GDP - per capita country ranks ]
GDP - composition by sector:
agriculture: 5.2%
[see also: GDP - composition by sector - agriculture country ranks ]
industry: 24%
[see also: GDP - composition by sector - industry country ranks ]
services: 70.8% (2009 est.)
[see also: GDP - composition by sector - services country ranks ]

Labor force:
189,000 (2009 est.)
[see also: Labor force country ranks ]

Labor force - by occupation:
agriculture: 3%
[see also: Labor force - by occupation - agriculture country ranks ]
industry: 19%
[see also: Labor force - by occupation - industry country ranks ]
services: 78% (2007)
[see also: Labor force - by occupation - services country ranks ]

Unemployment rate:
8.8% (2009 est.)

1.642% (2008 est.)
note: this figure climbed to 9.4% as of February 2009
[see also: Unemployment rate country ranks ]
Population below poverty line:
NA%
[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%
[see also: Household income or consumption by percentage share - highest 10% country ranks ]

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


Investment (gross fixed):
18.6% of GDP (2009 est.)
[see also: Investment (gross fixed) country ranks ]

Budget:
revenues: $3.879 billion
[see also: Budget - revenues country ranks ]
expenditures: $5.488 billion (2009 est.)
[see also: Budget - expenditures country ranks ]

Public debt:
100.6% of GDP (2009 est.)

56.5% of GDP (2008 est.)
[see also: Public debt country ranks ]

Inflation rate (consumer prices):
12% (2009 est.)

12.7% (2008 est.)
[see also: Inflation rate (consumer prices) country ranks ]
Central bank discount rate:
22% (31 December 2008)

15.25% (31 December 2007)
[see also: Central bank discount rate country ranks ]
Commercial bank prime lending rate:
NA% (31 December 2008)

19.29% (31 December 2007)
[see also: Commercial bank prime lending rate country ranks ]
Stock of money:
$NA (31 December 2008)

$6.64 billion (31 December 2007)
[see also: Stock of money country ranks ]
Stock of quasi money:
$NA (31 December 2008)

$15.05 billion (31 December 2006)
[see also: Stock of quasi money country ranks ]
Stock of domestic credit:
$NA (31 December 2008)

$49.67 billion (31 December 2006)
[see also: Stock of domestic credit country ranks ]
Market value of publicly traded shares:
$NA (31 December 2008)

$40.56 billion (31 December 2007)

$36.1 billion (31 December 2006)
[see also: Market value of publicly traded shares country ranks ]
Agriculture - products:
potatoes, green vegetables; mutton, dairy products; fish

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

Industrial production growth rate:
-10% (2009 est.)
[see also: Industrial production growth rate country ranks ]

Electricity - production:
11.71 billion kWh (2007 est.)
[see also: Electricity - production country ranks ]

Electricity - consumption:
11.22 billion kWh (2007 est.)
[see also: Electricity - consumption country ranks ]

Electricity - exports:
0 kWh (2008 est.)
[see also: Electricity - exports country ranks ]

Electricity - imports:
0 kWh (2008 est.)
[see also: Electricity - imports country ranks ]

Oil - production:
0 bbl/day (2008 est.)
[see also: Oil - production country ranks ]

Oil - consumption:
19,880 bbl/day (2008 est.)
[see also: Oil - consumption country ranks ]

Oil - exports:
2,975 bbl/day (2008 est.)
[see also: Oil - exports country ranks ]

Oil - imports:
17,510 bbl/day (2008 est.)
[see also: Oil - imports country ranks ]

Oil - proved reserves:
0 bbl (1 January 2009 est.)
[see also: Oil - proved reserves country ranks ]

Natural gas - production:
0 cu m (2008 est.)
[see also: Natural gas - production country ranks ]

Natural gas - consumption:
0 cu m (2008 est.)
[see also: Natural gas - consumption country ranks ]

Natural gas - exports:
0 cu m (2008 est.)
[see also: Natural gas - exports country ranks ]

Natural gas - imports:
0 cu m (2008 est.)
[see also: Natural gas - imports country ranks ]

Natural gas - proved reserves:
0 cu m (1 January 2009 est.)
[see also: Natural gas - proved reserves country ranks ]

Current account balance:
$-1.03 billion (2009 est.)

$-6.606 billion (2008 est.)
[see also: Current account balance country ranks ]
Exports:
$4.218 billion (2009 est.)

$5.399 billion (2008 est.)
[see also: Exports country ranks ]
Exports - commodities:
fish and fish products 70%, aluminum, animal products, ferrosilicon, diatomite

Exports - partners:
Netherlands 33.8%, UK 11.7%, Germany 11.5%, US 5.8%, Japan 4.9%, Norway 4.1% (2008)

Imports:
$2.826 billion (2009 est.)

$5.699 billion (2008 est.)
[see also: Imports country ranks ]
Imports - commodities:
machinery and equipment, petroleum products, foodstuffs, textiles

Imports - partners:
Norway 10.9%, Germany 10.4%, Sweden 9%, US 8%, Denmark 7.4%, China 6.8%, Netherlands 6%, UK 4.4%, Japan 4% (2008)

Reserves of foreign exchange and gold:
$2.541 billion (31 December 2009 est.)

$2.5 billion (31 December 2008 est.)
[see also: Reserves of foreign exchange and gold country ranks ]
Debt - external:
$3.073 billion (2002 est.)
[see also: Debt - external country ranks ]

Stock of direct foreign investment - at home:
$NA
[see also: Stock of direct foreign investment - at home country ranks ]

Stock of direct foreign investment - abroad:
$NA
[see also: Stock of direct foreign investment - abroad country ranks ]

Exchange rates:
Icelandic kronur (ISK) per US dollar - 128.417 (2009), 85.619 (2008), 63.391 (2007), 70.195 (2006), 62.982 (2005) 

SOURCE : www.theodora.com 

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