Iceland: economy

What is Iceland's GDP growth rate?

Iceland's real GDP fell 1.1% in the second quarter of 2026 compared with the same quarter of 2025, according to the first estimate in Statistics Iceland's national accounts release of 31 August 2026. For the first half of 2026, GDP was 1.3% higher than a year earlier.

The fall came mainly from a wider goods trade deficit, which cut growth by 2.9 percentage points, while investment rose 5.7%, helped by record spending on data centres. Seasonally adjusted, GDP fell 3.0% from the first quarter. First estimates are often revised, and figures for 2023 to 2025 were revised in the same release.

Official sources: Statistics Iceland: national accounts, 2nd quarter 2026

What is the inflation rate in Iceland?

Consumer prices in Iceland were 5.9% higher in September 2026 than a year earlier, according to Statistics Iceland's consumer price index release of 29 September 2026. Prices rose 0.39% in the month, and the index less housing costs was up 5.7% over the year.

The September rise was pushed up by the end of a temporary VAT cut on petrol and diesel, which took VAT on fuel from 11% back to 24%, adding about 0.32% to the index. The index matters directly to households, because many Icelandic loans are indexed to it: the September figure applies for indexation in November 2026.

Official sources: Statistics Iceland: consumer price index, September 2026

What is the Central Bank of Iceland interest rate?

The Central Bank of Iceland's key interest rate is 8.00%, valid from 7 October 2026, according to the Central Bank of Iceland website, read on 15 October 2026. The next rate decision is due on 18 November 2026.

The key rate guides what banks charge on loans and pay on deposits, so changes feed through to mortgage and savings rates. Read it alongside inflation, which was 5.9% in the year to September 2026 according to Statistics Iceland's consumer price index: the gap between the two is the real interest rate.

Official sources: Central Bank of Iceland: key interest rate · Statistics Iceland: consumer price index, September 2026

What is the Icelandic króna exchange rate?

One euro was worth 136.40 Icelandic krónur and one US dollar 121.84 krónur, according to the official exchange rate shown on the Central Bank of Iceland website, read on 15 October 2026. One pound sterling was 161.64 krónur.

The rate moves from day to day, so check the date. Banks and card providers set their own buying and selling rates, which usually include a margin, so the rate you get when changing money can be a little worse.

Official sources: Central Bank of Iceland: official exchange rate

How much of Iceland's economy is tourism?

Tourism made up 8.8% of Iceland's GDP in 2025, up from 8.2% in 2024, according to preliminary results of Statistics Iceland's tourism satellite accounts, published 26 May 2026. Accommodation alone contributed about 2.6% of GDP, and tourism generated about 9.5% of all hours worked.

This counts only the direct contribution, not spending by suppliers. Hotel overnight stays in August 2026 were about 653,000, 2.5% fewer than a year earlier, according to the overnight stays release, while stays in all types of accommodation rose 3.3%.

Official sources: Statistics Iceland: tourism satellite accounts 2025 · Statistics Iceland: overnight stays, August 2026

What is Iceland's economic growth rate?

The latest figure from the World Bank, for 2025, is 1.3%. The peak was 8.9% in 2022 and the low -8.3% in 2009. Across Europe & Central Asia the middle value was 2.1%, and Iceland placed 35th highest of 49. Worldwide: 147th of 180.

What is GDP per capita in Iceland?

According to the World Bank, GDP per person in Iceland was $98,323 in 2025. No year since 2005 has been higher. It is 4th highest of 49 in Europe & Central Asia, where the median is $28,420. Of 180 countries with 2025 data, 5th highest.

How does Iceland's income per person compare after prices?

$83,431 in international dollars: that is GDP per person at purchasing power parity in Iceland for 2025, according to the World Bank. The peak was $83,561 in international dollars in 2024 and the low $37,973 in international dollars in 2005. It is 6th highest of 49 in Europe & Central Asia, where the median is $50,946 in international dollars. Worldwide: 11th of 179.

What share of Iceland's economy is exports?

The latest figure from the World Bank, for 2025, is 40.1% of GDP. The peak was 54.2% of GDP in 2012 and the low 29.8% of GDP in 2005. Europe & Central Asia median: 47.7% of GDP; Iceland is 31st highest of 46. World rank, highest first: 57th of 133.

What is Iceland's current account balance?

In 2025, the current account balance in Iceland was -3.9% of GDP, according to the IMF, which is a deficit. Since 2005 it has ranged from -23.0% of GDP (2008) to 9.1% of GDP (2016). Europe & Central Asia median: -0.3% of GDP; Iceland is 33rd highest of 47. World rank, highest first: 95th of 132.

How much foreign direct investment goes into Iceland?

In 2025, net inflows of foreign direct investment in Iceland was -2.2% of GDP, according to the IMF. The peak was 31.3% of GDP in 2007 and the low -27.9% of GDP in 2017. Across Europe & Central Asia the middle value was 1.9% of GDP, and Iceland placed 45th highest of 49. Worldwide: 171st of 179.

How high are loan rates in Iceland?

The latest figure from the IMF, for 2025, is 11.0%. Its high point since 2005 was 2008, at 20.1%; its low point was 2021, at 5.4%. Europe & Central Asia median: 8.0%; Iceland is 5th highest of 17. Of 73 countries with 2025 data, 27th highest.