CIA Factbook The World Factbook 1994: IcelandEconomy Overview: Iceland's Scandinavian-type economy is basically capitalistic, but with an extensive welfare system, relatively low unemployment, and comparatively even distribution of income. The economy is heavily dependent on the fishing industry, which provides nearly 75% of export earnings and employs 12% of the workforce. In the absence of other natural resources—except energy—Iceland's economy is vulnerable to changing world fish prices. Iceland's economy has been in recession since 1988. The recession continued in 1993 due to a third year of cutbacks in fishing quotas as well as falling world prices for the country's main exports: fish and fish products, aluminum, and ferrosilicon. Real GDP declined 3.3% in 1992 and rose slightly, by 0.4%, in 1993. The center-right government's economic goals include reducing the budget and current account deficits, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, diversifying the economy, and privatizing state-owned industries. The recession has led to a wave of bankruptcies and mergers throughout the economy, as well as the highest unemployment of the post-World War II period. Inflation, previously a serious problem, declined from double digit rates in the 1980s to only 3.7% in 1992-93. National product: GDP—purchasing power equivalent—$4.2 billion (1993) National product real growth rate: 0.4% (1993 est.) National product per capita: $16,000 (1993) Inflation rate (consumer prices): 4% (1993) Unemployment rate: 4.5% (1993 est.) Budget: • revenues: $1.8 billion • expenditures: $1.9 billion, including capital expenditures of $191 million (1992) Exports: $1.5 billion (f.o.b., 1992) • commodities: fish and fish products, animal products, aluminum, ferrosilicon, diatomite • partners: EC 68% (UK 25%, FRG 12%), US 11%, Japan 8% (1992) Imports: $1.5 billion (c.i.f., 1992) • commodities: machinery and transportation equipment, petroleum products, foodstuffs, textiles • partners: EC 53% (Germany 14%, Denmark 10%, UK 9%), Norway 14%, US 9% (1992) External debt: $3.9 billion (1992 est.) Industrial production: growth rate 1.75% (1991 est.) Electricity: • capacity: 1,063,000 kW • production: 5.165 billion kWh • consumption per capita: 19,940 kWh (1992) Industries: fish processing, aluminum smelting, ferro-silicon production, geothermal power Agriculture: accounts for about 15% of GDP; fishing is most important economic activity, contributing nearly 75% to export earnings; principal crops —potatoes, turnips; livestock—cattle, sheep; self-sufficient in crops; fish catch of about 1.1 million metric tons in 1992 Economic aid: • recipient: US commitments, including Ex-Im (FY70-81), $19.1 million Currency: 1 Icelandic krona (IKr)=100 aurar Exchange rates: Icelandic kronur (IKr) per US$1—72.971 (January 1994), 67.603 (1993), 57.546 (1992), 58.996 (1991), 58.284 (1990), 57.042 (1989) Fiscal year: calendar year