IcelandChapitres
Iceland has a highincome, small open economy with a very high standard of living and widespread use of renewable energy, notably geothermal and hydropower. The country’s economy is supported by a strong tourism sector and key export industries such as aluminium and marine products, but it remains vulnerable to external shocks due to its size and openness. Iceland also faces natural risks from volcanic and seismic activity, and economic activity can be volatile because of its reliance on tourism. Recent forecasts suggest a recovery in growth following a weaker year, underpinned by improvements in sectors like fishing and tourism, while inflation is expected to ease gradually. Public finances and the current account are projected to stabilise modestly as government deficits narrow and export performance strengthens.
Source: Coface
Indicateurs clés
- Surface
- 103,000 sq km
- Population
- 386,506 (2024)
- Type de gouvernement
- unitary parliamentary republic
- Langues
- Icelandic, English, Nordic languages, German
- PIB
- $33.26 billion (2024)
- Taux de croissance
- -1.0% (2024)
- HDI
- 1
- Capitale
- Reykjavik
Indicateurs macroéconomiques
GDP growth is set to increase from 1.1% in 2025 to 1.6.% in 2026 and 3.6% in 2027, driven by robust private consumption and a rebound of exports. Business investment growth will decline from a high level. The unemployment rate will edge up above 4%, but the labour market will remain tight. Inflation currently hovers around 4% and is expected to reach the target by the second half of 2026. Major risks include a violent volcanic eruption and further tariff escalation affecting Iceland’s main export goods.
The central bank is expected to continue lowering the policy rate in early 2026 and cut it further until it reaches around 5% in 2027, which is appropriate. Fiscal policy is tight and set to remain so over 2026-27, which will help underpin disinflation and build up fiscal space. Reforming the stringent regulatory framework and fostering competition will strengthen business dynamism and raise productivity.
Source: OECD – Economic Outlook
IMF Statistics:
| Subject descriptor | 2023 | 2024 | 2025 | 2026 | 2027 |
|---|---|---|---|---|---|
|
All Items, Consumer price index (CPI), Period average, percent change Percent (Units) |
8.74 |
5.859 |
4.221 |
3.063 |
2.508 |
|
Current account balance (credit less debit), Percent of GDP Percent (Units) |
-1.029 |
-2.61 |
-3.568 |
-1.119 |
-0.318 |
|
Current account balance (credit less debit), US dollar US dollar (Billions) |
-0.326 |
-0.868 |
-1.37 |
-0.485 |
-0.148 |
|
Exports of goods and services, Volume, Free on board (FOB), Percent change Percent (Units) |
4.681 |
-2.323 |
2.783 |
2.96 |
3.303 |
|
Gross domestic product (GDP), Constant prices, Percent change Percent (Units) |
5.186 |
-0.971 |
1.427 |
2.306 |
2.424 |
|
Gross domestic product (GDP), Current prices, Per capita, US dollar US dollar (Units) |
84425.32 |
86663.851 |
98149.915 |
108591.227 |
114326.096 |
|
Gross domestic product (GDP), Current prices, US dollar US dollar (Billions) |
31.678 |
33.255 |
38.386 |
43.404 |
46.655 |
|
Imports of goods and services, Volume, Cost insurance freight (CIF), Percent change Percent (Units) |
-2.022 |
3.979 |
4.567 |
-0.58 |
2.679 |
|
Unemployment rate |
3.375 |
3.367 |
3.926 |
3.973 |
3.98 |
Estimates
Source: IMF Statistics - Iceland
Le Luxembourg et le pays
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 04.10.1999 (Memorial 2001, A No.96 , p.1907)
- Effective as of 01.01.2002 (Memorial 2001, A No.96 , p.1907)
- Amendment of the Convention from 28.08.2009 (Memorial 2010, A No.51, p.830)
- Effective as of 01.01.2011 (Memorial 2010, A No.51, p.830)
Air Services agreement
- Agreement from 10.23.1952 (Memorial 1953, p. 735)
- Effective as of 29.09.1953 (Memorial 1953, p. 1330)
Informations supplémentaires
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact points in Iceland
Embassy of the Grand Duchy of Luxembourg in London
Ambassador with residence in London:Mr Georges Friden
27, Wilton Crescent
GB-London SWIX 8SD
United Kingdom
Tel.: (+44 20) 7235 69 61/62/63
Fax: (+44 20) 7235 97 34
E-Mail: londres.amb@mae.etat.lu
Site web: www.londres.mae.lu
Honorary Consul
Reykjavik
Honorary Consul with jurisdiction over Iceland:
Mr Bjarni MARKUSSON
c/o Chairman of the Board,
Grofin 1, 3rd floor
IS-101 Reykjavik
Iceland
Tel.: (+354) 414 6802
E-mail: reykjavik@consul-hon.lu
Source: Ministry of Foreign Affairs of Luxembourg
Country risk as defined by Office du Ducroire for Iceland
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Link: Ducroire Office – Country Risk for Iceland