Iceland Economy


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Iceland follows a capitalist economic policy with a generous welfare system. The country depends predominantly on the fishing industry. Iceland is a developed nation with a GDP of approximately US $12.172 billion. It also enjoys the distinction of being the world's 4th most productive country per capita. Icelandic krona (ISK) is the currency of Iceland.

Iceland possess a Scandinavian-type economy with a capitalist base. A generous welfare system ensure a surprisingly proper income distribution throughout is population. The fishing industry dominates Iceland economy, with approximately 70% of its export earnings obtained through fish and related products. Marine activity is also a major employer. More than 6% of Iceland population depends upon fishing and its ancillary activities as their source of livelihood. Iceland also exports animal products, diatomite and aluminum. Principal export partners comprise of countries like the Netherlands, Germany, Spain, Ireland and United Kingdom. Its biggest export market is Netherlands with 21.3% of its total exports going to the European nation. Total value of exports from Ireland was $4.793 billion f.o.b.

Iceland's total value of imports in 2007 was $6.181 billion. The main imported commodities are foodstuffs, textiles, machinery and equipment, and petroleum products. Iceland has seen considerable foreign investment in its hydro power and aluminum sectors. This has catalyzed economic growth. Present day government policies strive to contain inflation, streamline fishing and agricultural policies, current account deficit reduction and restraining foreign monetary borrowing.

Tourism in Iceland is a nascent industry. Whale watching and ecotourism comprise big businesses. Other new businesses in Iceland is software production, financial services and biotechnology.

Services account for the most persons in employment. Approximately 71% of Icelandic population is dependent upon it. Industry (23%) and agriculture (5.1%) are other notable sectors providing employment. Inflation rate in 2007 was 5.1%.