Economy - overview 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 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%.

GDP purchasing power parity - $5.71 billion (1997 est.)

GDP - real growth rate 4.9% (1997 est.)

GDP - per capita purchasing power parity - $21,000 (1997 est.)

GDP - composition by sector
agriculture: 9.6%
industry: 22.1%
services: 68.3% (1991)

Inflation rate - consumer price index 2.3% (1996)

Labor force
total: 131,000 (1996 est.)
by occupation: manufacturing 12.9%, fishing and fish processing 11.8%, construction 10.7%, other services 59.5%, agriculture 5.1% (1996 est.)

Unemployment rate 3.8% (1997 est.)

Budget
revenues: $1.9 billion
expenditures: $2.1 billion, including capital expenditures of $146 million (1996 est.)

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

Industrial production growth rate NA%

Electricity - capacity 1.083 million kW (1995)

Electricity - production 4.916 billion kWh (1995)

Electricity - consumption per capita 18,481 kWh (1995)

Agriculture - products potatoes, turnips; cattle, sheep; fish catch of about 1.1 million metric tons in 1992

Exports
total value: $1.8 billion (f.o.b., 1996)
commodities: fish and fish products 75%, animal products, aluminum, ferrosilicon, diatomite
partners: UK 19%, Germany 14%, US 12%, Japan 11%, Denmark 8%, France 7% (1995)

Imports
total value: $2 billion (f.o.b., 1996)
commodities: machinery and transportation equipment, petroleum products, foodstuffs, textiles
partners: Germany 11%, Norway 10%, UK 10%, Denmark 9%, US 8%, Sweden 7% (1995)

Debt - external $2.2 billion (1996 est.)

Economic aid $NA

Currency 1 Icelandic krona (IKr) = 100 aurar

Exchange rates Icelandic kronur (IKr) per US$1 - 72.707 (January 1998), 70.904 (1997), 66.500 (1996), 64.692 (1995), 69.944 (1994), 67.603 (1993)

Fiscal year calendar year

NOTE: The information regarding Iceland on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Iceland Economy 1998 information contained here. All suggestions for corrections of any errors about Iceland Economy 1998 should be addressed to the CIA.