The economy of Iceland is small and subject to high volatility. With a population of 350,000, this is $55,000 per capita. Iceland has a mixed economy with high levels of free trade and government intervention. Hydro-power is the primary source of home and industrial electrical supply in Iceland.
The following tables and chart will tell the change details in last 5-10 years:
Iceland Distribution of workforce from the last 5 years:
Iceland Distribution of GDP across economic sectors:
Here attached the last 10 years chart of Iceland GDP: (amount in billion USD):
3 Sectors of the Economy – Agriculture, Industry and Services:
Agriculture is an important part in the Iceland’s economy. Iceland is self-sufficient in the production of meat, dairy products and eggs. It employs 3.83% of the total workforce of Iceland and contributes almost 4.34% in the Iceland’s economy.
In 2019, the value of imported food and beverages to Iceland was more than $514 million. Iceland does not produce enough food for the domestic market, and thus is dependent on imported food products. Organic, vegetarian, vegan, and healthy foods are increasingly popular in Iceland. There are high tariffs on most agricultural products that originate from outside the EU.
Major products in this sector:
Fisheries: The Fishing industry is one of the key industries in Iceland, and directly employs around 9000 people, or approx. 5.3% of the total workforce. The seafood industry contributed 11% to the GDP directly. In 2019 fisheries contributed almost 17% of total export of Iceland.
Agriculture Subsidy in Iceland:
Iceland gets less than 1% share under Common Agriculture Policy which is the lowest among in all European Countries.
European Union Common Agriculture Policy:
The CAP is a common policy for all EU countries. It is managed and funded at European level from the resources of the EU’s budget. The CAP takes action with:
- Income support through direct payments ensures income stability, and remunerates farmers for environmentally friendly farming and delivering public goods not normally paid for by the markets, such as taking care of the countryside;
- Market measures to deal with difficult market situations such as a sudden drop in demand due to a health scare, or a fall in prices as a result of a temporary oversupply on the market;
- Rural development measures with national and regional programs to address the specific needs and challenges facing rural areas.
Industries plays an important part in the Iceland’s economy. It accounts for 19.39% of the GDP and employed almost 16.1 % of the workforce.
Major Industries in this sector:
Aluminum: Iceland exports of aluminum was US$1.6 Billion during 2020 which is almost 20% of the total export in 2020. Iceland is the 11the largest aluminum producer in the world. This industry creates almost 4000 direct jobs in Iceland.
This is one of the top 3 big industries in the Iceland.
Service sector is a significant part in the Iceland’s economy. It contributes almost 65% in the GDP and employed almost 80% of the total Iceland’s workforce.
Major Industries in this sector:
Tourism: Tourism is the major export earner in Iceland, accounting for ISK 520 billion in 2019 – equivalent to 39% of total export revenue. The sector directly contributed 8.6% of GDP in 2019, and employed some 30 000 people – representing 15.7% of the workforce. Travel exports represented 47.7% of total service exports in 2019. In 2019 two million international tourists travelled in Iceland. Iceland is one of the most tourism dependent countries on earth
Financial Sector: Iceland was particularly hard affected by the global recession, because of the failure of its banking system and a subsequent economic crisis. The Icelandic financial crisis involved the failure of all three of the country’s major privately owned commercial banks, multiplied in size during the previous decade. The transformation and recovery of the Icelandic banking sector was mostly completed in 2012. The banking sector is now dominated by four universal banks which are Arion Bank, Islandsbanki, Landsbankinn, Kvika banki.
Top Companies in Iceland:(according to market cap)
|Company Name||Sector||Market Cap (ISK)|