Flag: blue with a red cross outlined in white that extends to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag)
- Economy Overview: Iceland's prosperous Scandinavian-type economy is basically capitalistic, but with extensive welfare measures, low unemployment, and comparatively even distribution of income. The economy is heavily dependent on the fishing industry, which provides nearly 75% of export earnings. In the absence of other natural resources, Iceland's economy is vulnerable to changing world fish prices. National output declined for the second consecutive year in 1989, and two of the largest fish farms filed for bankruptcy. Other economic activities include livestock raising and aluminum smelting. A fall in the fish catch is expected for 1990, resulting in a continuation of the recession.
GDP: $4.0 billion, per capita $16,200; real growth rate - 1.8% (1989 est.)
Inflation rate (consumer prices): 17.4% (1989 est.)
Unemployment rate: 1.3% (1989 est.)
Budget: revenues $1.5 billion; expenditures $1.7 billion, including capital expenditures of $NA million (1988)
Exports: $1.4 billion (f.o.b., 1988); commodities—fish and fish products, animal products, aluminum, diatomite; partners—EC 58.9% (UK 23.3%, FRG 10.3%), US 13.6%, USSR 3.6%
Imports: $1.6 billion (c.i.f., 1988); commodities—machinery and transportation equipment, petroleum, foodstuffs, textiles; partners—EC 58% (FRG 16%, Denmark 10.4%, UK 9.2%), US 8.5%, USSR 3.9%
External debt: $1.8 billion (1988)
Industrial production: growth rate 4.7% (1987 est.)