Iceland/

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, 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.

$11.86 billion (2010 est.)

$12.28 billion (2009 est.)

$13.17 billion (2008 est.)

$12.77 billion (2010 est.)

-3.4% (2010 est.)

-6.8% (2009 est.)

1% (2008 est.)

$38,400 (2010 est.)

$40,000 (2009 est.)

$43,300 (2008 est.)

188,000 (2010 est.)

8.6% (2010 est.)

8% (2009 est.)

NA%

28 (2006)

25 (2005)

12.4% of GDP (2010 est.)

123.8% of GDP (2010 est.)

113.9% of GDP (2009 est.)

5.5% (2010 est.)

12% (2009 est.)

14.55% (31 December 2009)

22% (31 December 2008)

18.99% (31 December 2009 est.)

19.29% (31 December 2007)

$4.413 billion (31 December 2010 est)

$4.438 billion (31 December 2009 est)

$19.97 billion (31 December 2009 est.)

$24.28 billion (31 December 2009 est.)

$46.03 billion (31 December 2010 est.)

$54.65 billion (31 December 2009 est.)

$1.128 billion (31 December 2009)

$5.557 billion (31 December 2008)

$40.56 billion (31 December 2007)

potatoes, green vegetables; mutton, chicken, pork, beef, dairy products; fish

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

-1% (2010 est.)

16.84 billion kWh (2009 est.)

16.48 billion kWh (2009 est.)

0 kWh (2008 est.)

0 kWh (2008 est.)

0 bbl/day (2009 est.)

18,900 bbl/day (2009 est.)

1,915 bbl/day (2008 est.)

16,390 bbl/day (2008 est.)

0 bbl (1 January 2010 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (1 January 2010 est.)

-$42 million (2010 est.)

-$440 million (2009 est.)

$4.619 billion (2010 est.)

$4.05 billion (2009 est.)

fish and fish products 40%, aluminum, animal products, ferrosilicon, diatomite

Netherlands 30.71%, UK 12.73%, Germany 11.21%, Norway 5.75%, Spain 4.82% (2009)

$3.677 billion (2010 est.)

$3.318 billion (2009 est.)

machinery and equipment, petroleum products, foodstuffs, textiles

Norway 12.97%, Netherlands 8.62%, Germany 8.3%, Sweden 8.03%, Denmark 7.27%, US 6.94%, China 4.98%, UK 4.55%, Brazil 4.09% (2009)

$4.206 billion (31 December 2010 est.)

$3.883 billion (31 December 2009 est.)

$3.073 billion (2002)

$NA (31 December 2010)

$9.2 billion (#REF!)

$NA

$8.8 billion (31 December 2008)

Icelandic kronur (ISK) per US dollar - 139.319 (2010), 123.638 (2009), 85.619 (2008), 63.391 (2007), 70.195 (2006)