Iceland’s Economic Outlook Is Positive

DATE: Oct, 3   COMMENTS: 0   AUTHOR: Allan Azarola

Iceland has a small budget surplus; public debt is falling, and in 2015, Iceland gave back the loan that was given by the IMF in 2008. Unemployment has continued to decline. The difficulties facing the state include the determination of labor market forces and the support of financial security in a context of continuous removal of capital controls. Central Bank of Iceland decided in March 2017 to raise most of the limitations on foreign exchange activities and the cross-border transfer of domestic and international currency that had been in the state for nearly nine years.

Iceland’s economy relies mainly on fishing, as it has done for years. Fishing gives 40% of the country’s export profits and employs 8% of the workforce. Though, due to decaying fish stocks, Iceland has been expanding its economy into production and industries including software production, financial services, and biotechnology. The economy does still depend on fishing though its value is declining and other sectors are growing. One such developing industry is travel as the tourism area is increasing due to recent trends in whale-watching and ecotourism.

Iceland’s main exports are fish, fish products, metals, wool, and sheepskin products; the main export associates being the UK, Germany, US, Netherlands, and Spain. The main imports are petroleum products, foodstuffs, machinery, equipment, and textiles; the main import partners are Norway, the US, Germany, Sweden, and Denmark. That’s also why Icelandic to English translations services have grown over the years.

Fish and fish products hold a fantastic share in Icelandic exports: in the 1960s it was above 90%, dropping to 75-80% when the trading of aluminum began in 1969 and with the arrival of ferrosilicon in 1972.  The changes from one year to another in the percentage of fish in total commodities export can more frequently than not be drawn to the supply of fish rather than to export drives for other products.

Exports are focused into a few broad groups of products; imports are much diversified. Iceland is dependent on imports for its need for oil and oil products, for its consumption of wheat it is reliant on foreign suppliers, and the timber used yearly must come from external origins. For investment assets, too, the Icelandic economy depends to a substantial extent on imports as most of the device used is of a foreign source. As a rule of a thumb, the import content of investment is about 40%.

Main Areas of Industry

The industrial area shows nearly a quarter of GDP and uses 22.2% of the workforce, displaying an improvement of almost 5% when related to the previous year. Services estimate for 71.1% of GDP and employ 78.2% of the workforce.

The agricultural area provides somewhat over 6% of Iceland’s GDP and employs 4.8% of the workforce. Vast fields of sheep field are among the most critical agricultural supplies in the country. Main agricultural products are tomatoes, cucumbers, potatoes, carrots, green vegetables; chicken, pork, beef, mutton, and dairy products.

The Icelandic economy depends partly on its renewable natural resources and associated activities:  hydraulic and geothermal power, deep sea fishing, and pastures. Fishing accounts for almost 6%. The hydroelectric potential stimulates the production of aluminum, the primary resource for export and which focuses 71.7% of the electricity generated on the island.

For the past many years, Iceland’s economy has also improved thanks to the services sector. Iceland has grown the rear-base of various organizations concentrated on computers and software. There are too many call centers in the nation.

The business scene in Iceland is fast moving, focused and business friendly. For the active base, expert services and even power, Iceland meets the highest international standards. Complicated regulations did not limit it nor crushed with an extensive system of taxation.

It is very easy to build a business in Iceland, which was listed as a top performer on the World Bank rankings of best places to start a business. Iceland reduces red tape for international trade, allowing choices to be made and executed quickly, with little time wasted.

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