An Insight into the Icelandic Economy (1997 figures)
Gross Domestic Production in Iceland was 7.36 billion dollars in the year 1997 (1). The average growth was 4.8% from 1973-87, which is a high economic growth. The economy then had a stagnation period until 1994. The main reasons were shrinking fish quotas, especially cod which accounts for most of the production by far. No country in OECD had less growth of GDP per inhabitant from 1980-95 except New Zealand. The economic growth has increased in the last four years, however, partly due to distant water fisheries, frowned upon by neighboring North Atlantic fishing nations. In 1996 it was 5.7%, which is a record since 1987. The growth rate for 1997 was 4.5% (2). The growth rate since 1997 has been around 3-4%.
Iceland is a non-EC member but a member of EFTA since 1972 and the European Economic Area since 1994.
The Icelandic export revenues have accounted for around or a little more than one third of the GDP for half a century. This ratio is abnormally low for such a small country, as small nations need a lot of foreign trade to compensate for the disadvantage of a small home market (3). In 1997, 71.3% of the export product revenues came from fish-products. This ratio has been ranging from 67-80% in the last 15 years. By comparison, the ratio of primary products in the OECD countries is 12% on the average. Almost 22% were industrial goods of which aluminum production accounted for 11.6%. By comparison, the average for industrial products in the OECD countries is 80%. Agricultural products accounted for 1.6% and other goods 5.1%.
|
Market | |
| EC | 60.6% |
| NAFTA | 15.2% |
| Japan | 6.6% |
| EFTA | 8.6% |
| Others | 9.0% |
Most of the export by far is to the European Union countries, of which the U.K. is the main export market of Icelandic goods, accounting for 19% of all exports. The U.S., which was our main market ten years ago, accounts for 14%. Supplies of seafood to the U.S. have dropped from a 25% share to 13% during the last six years. Germany is third with 13.1%, Japan fourth with 6.6%, France fifth with 6.3% and Denmark takes sixth place with 5.7% (4).
[1] Hagtölur mánaðarins (Economic Statistics), Mar. 1998, p. 27.
[2] According to Björn Rúnar, The National Economic Institute.
[3] Gylfason, Þ., 1996, in Hagsæld, p. 6.
[4] Hagtölur mánaðarins (Economic Statistics), Mar. 1998, p. 23.
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