After a period of continuous growth between the second half of the 1990s and 2007, Iceland was badly hit by the global international crisis since October 2008. The rapid expansion of the Icelandic financial system left Iceland completely vulnerable to affront the international financial shocks, up to the point of practically inducing the country into a situation of "national bankruptcy". On top of this Iceland's economy had previously been stimulated by a real estate boom, which contributed to destabilizing the economic situation even more.
Confronted to the total collapse of its financial system, the former government of Geeir Haarde had to nationalize the country's main banks. However, inflation continues to climb (reaching almost 18.6% today). In November 2008, the IMF granted a loan of USD 2 billion in order to stabilize the Icelandic krona's exchange rate, which has suffered considerably due to the crisis, and to re-establish confidence in the economy. In order to benefit from European aid and from the protection that the Euro currency provides, Iceland requested in July 2009 a candidature for its accession to the European Union. The country has officially declined to go further due to the anti-European sentiment of its population.
in 2013 the growth rate reached 1.9% (following 2.5% in 2012) and should come back to 2.5% in 2014. Main factor in this growth rate, household consumption will remain strong in 2014, pushed by the sharp decrease of unemployment (5.6% in 2013 due to the tourism boom), by the increase in salary and by the stabilization of inflation (3.8% in 2013).
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||14.03||13.58||14.62||16.20||17.22|
|GDP (Constant Prices, Annual % Change)||2.7||1.5||3.3e||2.9||3.0|
|GDP per Capita (USD)||44,065||42,505||45e||50,006||52,967|
|General Government Balance (in % of GDP)||-3.8||-2.1||-1.9e||-0.9||-1.0|
|General Government Gross Debt (in % of GDP)||99.3||96.9||89.9e||86.4||88.2|
|Inflation Rate (%)||4.0||5.2||3.9e||2.5||3.3|
|Unemployment Rate (% of the Labor Force)||7.4||5.8||4.4||4.0||3.5|
|Current Account (billions USD)||-0.89||-0.72||0.57||0.33||0.40|
|Current Account (in % of GDP)||-6.3||-5.3||3.9e||2.1||2.3|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
The agricultural sector has contributed in 2013 to 5.9% of the Icelandic GDP, the industrial sector to 22.9% and services to more than 71.2%.
The Icelandic economy relies partly in its renewable natural resources and its related industries: deep sea fishing, hydraulic and geothermal power and pastures.
Fishing accounts for almost 6% of GDP (more than 11% with the processing sector and over 18% when counting its indirect contribution).
It has been several years that its economy has also grown thanks to the services sector. As a fact, Iceland has become the rear-base of several companies specialized in computers and software. There are also many calling centers in the Icelandic territory.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||5.5||18.2||75.8|
|Value Added (in % of GDP)||7.7||24.5||67.8|
|Value Added (Annual % Change)||3.8||1.8||0.7|
Source: World Bank - Last Available Data.
|Iceland Crown (ISK) - Average Annual Exchange Rate For 1 USD||123.64||122.24||115.95||125.08||122.18|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Iceland has always been open to international trade. Almost half of the exports are fishing products. Iceland also exports aluminum and ferrosilicon (around 40% of its total exports in 2013), as well as dairy products. Tourism has been on a constant rise since 2011, stimulated by the collapse of the national currency. Certain traditional sectors, such as fishing, are doing well, which stimulates the dynamism of the exports.
In 2013, Iceland's main customers have been the Netherland (over 30% of exports), Germany, the UK, Norway and the United-States.
Its main suppliers were Norway (over 17% of imports), the USA, Germany, China and Brazil.
The potentials of hydroelectricity stimulates aluminum production, the leading resource for export concentrating 70% of the electricity produced on the island in 2013.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||3,604||3,920||4,841||4,772||4,783|
|Exports of Goods (million USD)||4,057||4,604||5,347||5,064||4,998|
|Imports of Services (million USD)||1,912||2,187||2,590||2,756||2,866|
|Exports of Services (million USD)||2,303||2,465||2,939||3,020||3,432|
|Imports of Goods and Services (Annual % Change)||-22.4||4.3||6.8||4.9||0.4|
|Exports of Goods and Services (Annual % Change)||8.3||1.8||3.4||3.9||6.9|
|Imports of Goods and Services (in % of GDP)||40.8||43.1||47.9||50.4||47.4|
|Exports of Goods and Services (in % of GDP)||49.7||53.5||56.1||56.7||55.7|
|Trade Balance (million USD)||454||264||197||-1||63|
|Trade Balance (Including Service) (million USD)||842||1,063||816||544||1,777|
|Foreign Trade (in % of GDP)||90.5||96.6||104.0||107.1||103.1|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||40.7%|
(% of Imports)
|See More Countries||52.7%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2014|
|Unwrought aluminiumUnwrought aluminium||29.9%|
|Fish fillets and other fish meat, whether or not...Fish fillets and other fish meat, whether or not minced, fresh, chilled or frozen||16.6%|
|Frozen fish (excl. fish fillets and other fish...Frozen fish (excl. fish fillets and other fish meat of heading 0304)||8.9%|
|Fish, fit for human consumption, dried, salted or...Fish, fit for human consumption, dried, salted or in brine; smoked fish, fit for human consumption, whether or not cooked before or during the smoking process; flours, meals and pellets of fish, fit for human consumption||7.1%|
|Aluminium wire (excl. stranded wire, cables,...Aluminium wire (excl. stranded wire, cables, plaited bands and the like and other articles of heading 7614, electrically insulated wires, and strings for musical instruments)||3.5%|
|See More Products||34.0%|
|- bn USD of products imported in 2014|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||16.3%|
|Artificial corundum, whether or not chemically...Artificial corundum, whether or not chemically defined; aluminium oxide; aluminium hydroxide||9.2%|
|Carbon electrodes, carbon brushes, lamp carbons,...Carbon electrodes, carbon brushes, lamp carbons, battery carbons and other articles of graphite or other carbon, with or without metal, of a kind used for electrical purposes||6.9%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||4.0%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||2.4%|
|See More Products||61.1%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2011|
|Air transportAir transport||41.10%|
|Sea transportSea transport||4.67%|
|Personal travelPersonal travel||21.07%|
|Education-related expenditureEducation-related expenditure||0.21%|
|Business travelBusiness travel||4.13%|
|Merchanting and other trade-related...Merchanting and other trade-related services||8.04%|
|Other trade-related servicesOther trade-related services||3.42%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||5.80%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||3.75%|
|Business and management...Business and management consulting and public relations services||2.87%|
|Legal servicesLegal services||0.76%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.12%|
|Architectural, engineering,...Architectural, engineering, and other technical services||1.20%|
|Research and developmentResearch and development||0.38%|
|Other business servicesOther business services||0.36%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.11%|
|Operational leasing servicesOperational leasing services||1.01%|
|Franchises and similar rightsFranchises and similar rights||4.46%|
|Computer servicesComputer services||1.71%|
|Information servicesInformation services||0.16%|
|Other information provision...Other information provision services||0.16%|
|Telecommunications servicesTelecommunications services||1.21%|
|Postal and courier servicesPostal and courier services||0.23%|
|Other direct insuranceOther direct insurance||0.71%|
|Auxiliary servicesAuxiliary services||0.34%|
|Freight insuranceFreight insurance||0.06%|
|Audiovisual and related servicesAudiovisual and related services||0.38%|
|Embassies and consulatesEmbassies and consulates||1.02%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||0.34%|
|- bn USD of services imported in 2011|
|Air transportAir transport||18.39%|
|Sea transportSea transport||10.77%|
|Personal travelPersonal travel||22.73%|
|Education-related expenditureEducation-related expenditure||1.92%|
|Business travelBusiness travel||5.65%|
|Operational leasing servicesOperational leasing services||13.92%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||12.34%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||4.99%|
|Business and management...Business and management consulting and public relations services||2.56%|
|Legal servicesLegal services||2.21%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.22%|
|Other business servicesOther business services||3.19%|
|Research and developmentResearch and development||1.89%|
|Advertising, market research,...Advertising, market research, and public opinion polling||1.26%|
|Architectural, engineering,...Architectural, engineering, and other technical services||1.02%|
|Merchanting and other trade-related...Merchanting and other trade-related services||1.80%|
|Other trade-related servicesOther trade-related services||1.80%|
|Franchises and similar rightsFranchises and similar rights||1.84%|
|Other direct insuranceOther direct insurance||1.36%|
|Auxiliary servicesAuxiliary services||0.30%|
|Freight insuranceFreight insurance||0.23%|
|Telecommunications servicesTelecommunications services||2.05%|
|Postal and courier servicesPostal and courier services||0.32%|
|Computer servicesComputer services||1.52%|
|Information servicesInformation services||0.70%|
|Other information provision...Other information provision services||0.68%|
|News agency servicesNews agency services||0.02%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.04%|
|Audiovisual and related servicesAudiovisual and related services||0.37%|
|Embassies and consulatesEmbassies and consulates||0.76%|
Source: Comtrade, Last Available Data
The Prime Minister is the head of the government and holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Prime Minister also appoints the Cabinet.
- IP (Independence Party) – centre-right conservative political party, opposes joining the EU;
- PP (Progressive Party) - an agrarian and liberal political party;
- Alliance – a social-democratic party, based on the alliance of the People's Alliance (PA), Social Democratic Party (SDP) and Women's List;
- LGM (Left Green Movement) – advocates traditional socialist values, feminism and environmentalism;
- LP (Liberal Party) – a liberal party, opposes joining the EU and the war in Iraq.
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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