The Icelandic Economy
The economy of Iceland is small and subject to high volatility. In 2011, gross domestic product was US$12.3bn, or $38,000 per capita, based on purchasing power parity (PPP) estimates. The financial crisis of 2007–2010 produced a decline in GDP and employment, although the magnitude of this decline remains to be determined. Icelanders are slowly but surely pulling out of this crises.
Iceland has a mixed economy with high levels of free trade and government intervention. However, government consumption is less than in other Nordic countries. Geothermal power in Iceland is the primary source of home and industrial energy in Iceland.
The economy is heavily dependent upon fishing but efforts have been made to diversify, particularly into the travel industry. However, seafood exports continue to account for nearly three-quarters of merchandise exports and approximately half of all foreign exchange earnings. Surprisingly less than 10 per cent of the workforce is involved in fishing and fis processing due to technological advances. The travel industry makes up the second-largest export industry in Iceland with new tours, hotels in Iceland and other services growing with it.
The standard of living is high, with income per capita among the best in the world and the economy is service-oriented: two-thirds of the working population are employed in the service sector, both public and private.
Iceland is a member of the European Fee Trade Association (EFTA) and the European Economic Area (EEC).
The 2008–2011 Icelandic financial crisis was a major economic and political crisis in Iceland that involved the collapse of all three of the country's major privately owned commercial banks, following their difficulties in refinancing their short-term debt and a run on deposits in the Netherlands and the United Kingdom connected to the infamous ICESAVE accounts. Relative to the size of its economy, Iceland’s systemic banking collapse is the largest suffered by any country in economic history.
Due to the fact that Iceland is a small island in the middle of the North Atlantic Ocean the economy of Icelandis equally small and is therefore subject to high volatility.
Iceland has despite this seen genuine economic prosperity and the standard of living is quite high. In 2011, gross domestic product was US$12.3bn, or $38,000 per capita, based on purchasing power parity (PPP) estimates.
This Icelandic bank was established by the Icelandic parliament in hopes that it would boost monetary transactions and encourage the country’s early industries. At first the bank's operations were restricted by its limited financial capacity, but following the turn of the 20th century Icelandic society progressed and prospered.Landsbanki grew and developed with the nation.
The word króna, meaning "crown", is related to those of other Nordic currencies (such as the Danish krone, Swedish krona and Norwegian krone) and to the Latin word corona ("crown"). The name "Icelandic crown" is sometimes used, for example in the financial markets.