I&S Macroeconomics
Aadya and Johanna
E-9A
Key Features
The economy of Iceland is the smallest economy within the OECD (Organisation for Economic Cooperation and Development). The GDP per capita generated is 70,056.87 USD as of 2017. This value is only about 1/100 of the US economy. Tourism is the largest export of Iceland and it made up for more than 10% of the country’s GDP. The GDP growth of Iceland is 3.6% annual change (2017). There has been a small increase which keeps the GDP growth steady (Hagstofan).
The key industries of Iceland are tourism, fisheries, and energy production industries (Iceland-Wikipedia) In 2017, the tourism sector in Iceland directly hired about 26,800 people. Which makes Iceland one of those countries that depends highly on their different tourism destinations. Iceland is the second biggest fisheries nation in the North East Atlantic. The renewable energy sources available make up 100% of Iceland’s electricity (Main Industries and Services). The amount of hydro and geothermal generators generate the most electricity worldwide.
The main export of Iceland is raw aluminium (“Iceland.” OEC). It is 36% of all the exports and it’s value is $2.02B. The raw aluminium is exported mainly to countries in Europe: Netherlands, Germany, Spain, Poland, Austria etc. In 2017, Iceland exported $5.3B and was the 103rd largest exporter in the world. Iceland became the 111th largest importer in the world when they imported $7.53B in 2017. The main import of Iceland is refined petroleum which is imported at 9% with an import value of $679M.
The unemployment rate in Iceland is 2.6% in August 2018. The human capital index for Iceland is 0.74. It is a measure of the health, education and worker productivity on a scale of 1-10. The government spending of Iceland is 79,056 ISK million (refer to Fig. 3) Iceland has a rate closer to one which good for the future generations (Iceland Government Spending). The life expectancy rate is 82.5 years (refer to Fig. 4) and the adult literacy rate has remained stable around 99%. These features inform us that Iceland is a high income country.