Table of Contents

  • The economic situation and policies of Iceland were reviewed at a meeting of the Economic and Development Review Committee on 13 June 2019. The draft was revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 12 July 2019.The Secretariat’s draft report was prepared for the Committee by Hansjoerg Bloechliger and Vassiliki Koutsogeorgopoulou under the supervision of Piritta Sorsa. The draft has benefitted from consultancy work by Olga Rastrigina and Daniele Pacifico  and valuable background research by Laura Brogi.Statistical research was provided by Anne Legendre. Assa Fofana formatted and produced the layout.The previous Survey of Iceland was issued in June 2017.

  • Iceland fully recovered from the 2008 financial crisis. The country is rapidly catching up with the richest OECD economies but is now slowing.

  • Small, remote and subject to eruptive geology, Iceland has nonetheless converged towards the wealthiest economies of the OECD since independence 100 years ago (). Rapidly rising productivity and export orientation of the fishing industry were the core drivers of economic growth for decades, supported by a comprehensive quota management that helped maintain the sustainability of the fishing grounds (Haraldsson and Carey, 2011[1]). In the 1960s Iceland started to exploit its abundant renewable energy sources and attracted energy-intensive industries such as aluminium production, which boosted productivity further and improved the external balance. Regulatory reform, exchange rate liberalisation and tighter monetary and fiscal policy in the 1990s unleashed productive potential including the rise of the financial sector.