Iceland WT/TPR/S/273 
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  I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. Iceland is a developed economy situated in the north Atlantic with a current GDP per capita 
of approximately US$44,000.  The economy is do minated by services, followed by fishing and 
aluminium manufacturing.  The latter two were resp onsible for over 80% of Iceland's merchandise 
exports in 2010.  Iceland's economy registered  robust growth between 2003-07, with real GDP 
expanding by a cumulative 28% or an annual average of nearly 6%.  Growth was driven by private consumption and large investments in the power-inten sive industries, which in turn were underpinned 
by strong growth of disposable  income, easy access to credit and sharp increases in asset values.  
However, the growth also resulted in large external imbalances, with  net external debt (public and 
private) reaching 110% of GDP, gross internationa l liabilities of 625% of GDP, a high current account 
deficit, and an appreciating currency.  The global financial crisis in 2008 brought these issues to a 
head.  Iceland was one of the countries worst aff ected by the crisis as the banking system collapsed 
(Chapter IV(4)(i)) and the country went into deep recession.  Real GDP contracted by 6.8% and 4% in 2009 and 2010, respectively, with private cons umption, public consumption, and gross fixed 
investment contracting markedly (Table I.1).  Ho wever, despite the crisis, Iceland did not introduce 
protectionist measures.  Indeed, the recovery fro m the crises has been export led, with total 
merchandise trade as a proportion of GDP rising from 47% in 2005 to 70% in 2011, partly due to increased competitiveness, due, in turn, to the depreciation of the krona. 
Table I.1 
Selected macroeconom ic indicators, 2005-11  
  2005 2006 2007 2008 2009 2010 2011a 
Real GDP (ISK billion, 2005 prices) 1,025.7 1,074.0 1,138.3 1,152.8 1,074.3  1,031.1  1,062.5 
Real GDP (US$ billion, 2005 prices) 31.8  28.6 31.3 22.8 16.2  16.4  17.3 
Current GDP (ISK billion) 1,025.7 1,168. 6 1,308.5 1,482. 0 1,495.4  1, 534.2  1,630.2 
Current GDP (US$ billion) 16.3 16.7 20.4 16.9 12. 1  12.6  14.1 
GDP per capita at current market price (US$) 55,155.0 55,031.0 65,642.0 52,689.0 37,899.0  39,532.0  44,025.0 
National accounts (% change based on constant figures, unless otherwise indicated)  
Real GDP (2005 prices) 7.2 4.7 6.0 1.3 -6.8  -4.0  3.1 
   Consumption 9.9 3.7 5.2 -4.3 -10.7  -1.5  2.4 
        Private consumption expenditure 12.7 3.6 5.7 -7.9 -14.9  -0.4  4.0 
        Government cons umption expenditure 3.5 4.0  4.1 4.6 -1.7  -3.4  -0.6 
   Gross fixed capital formation 34.4 24.4 -12.2 -20.0 -51.6  -8.1  13.4 
   Exports of goods and services 7.5 -4.6 17.7 7.0 6.6   0.4  3.2 
   Imports of goods and services 29.3 11.3 -1.5 -18.4 -24.0  4.0  6.4 
          XGS/GDP (%, at current market price) 31.7 32.2 34.6 44.4 52.7  56.1  58.4 
          MGS/GDP (%, at current market price) 44.0 50.5 45.3 47.1 44.3  46.1  50.2 
Unemployment rate (%) 2.6 2.9 2.3 3.0 7.2 7.6 7.1 
Prices and interest rates (%, unless otherwise indicated)  
Inflation (CPI, % change) 4.0 6.7 5.1 12.7 12.0  5.4  4.0 
Central Bank repo rate (yield, end peri od) 10.50 14.25 15.25 22.00 -   -   .. 
Three-month treasury bills 10.00 -   -   -   -   -   .. 
Table I.1 (cont'd) 
 WT/TPR/S/273 Trade Policy Review 
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    2005 2006 2007 2008 2009 2010 2011a 
Exchange rate 
ISK/US$ (annual average) 62.98 70.18 64.06 87.95 123.64  122.24  115.95 
Nominal effective exchange rate (% change, based 
on CPI) 10.3 -10.9 2.7 -27.2 -28.1 1.5 0.3 
Real effective exchange rate (% change, based on 
CPI) 12.4 -7.0 5.5 -21.4 -19.2 5.0 1.4 
(% of current GDP, unless otherwise indicated)  
Fiscal policy of general government 
Total revenue 47.1 48.0 47.7 44.1 41.1  41.5  41.7 
   Tax revenue 37.4 38.1 37.5 33.8 30.8  30.9  31.6 
Total expenditure 42.2 41.6 42.3 57.6 51.0  51.6  46.1 
Overall balance 4.9 6.3 5.4 -13.5 -10.0  -10.1  -4.4 
Government gross debt 24.7 29.1 27.7 65.3 84.7  92.2  96.2 
Saving and investment 
Gross national saving 12.2 11.4 13.1 0.2 2.2  4.6  7.2 
Gross domestic investment 28.2 35.6 29.0 24.7 13.9  12.6  14.4 
Savings-investment gap -16.0 -24.3 -15.9 -24.5 -11.7  -8.0  -7.1 
External sector 
Current account balance  -16.2 -23.8 -15.7 -24.5 -11.7  -8.0  -7.1 
Net merchandise trade  -9.1 -13.4 -6.7 -0.4 6.0  7.8  5.9 
   Merchandise exports 19.0 20.8 23.4 31.5 33.5  36.6  38.0 
   Merchandise imports 28.1 34.2 30.1 32.0 27.5  28.7  32.0 
Services balance -3.1 -4.1 -3.4 -1.9 2.4  2.2  2.2 
Financial account 13.7 34.5 19.3 76.8 -16.6  22.9  6.0 
     Direct investment -24.6 -10.2 -16.5 30.4 -18.2  20.7  8.1 
Terms of trade (% change) -0.3 6.8 -0.3 -6.1 -11.1  9.6  .. 
Merchandise exports  
       % change - national currency -3.7 24.9 25.7 52.6 7.3  12.0  10.3 
       % change in US$ 7.4 12.1 37.7 11.1 -23.7  13.3  16.3 
Merchandise imports  
       % change - national currency 20.6 38.9 -1.5 20.2 -13.3  7.4  18.4 
       % change in US$ 34.4 24.6 7.9 -12.5 -38.3  8.6  24.8 
Service exports  
       % change - national currency 12.4 2.5 10.6 28.2 54.5  4.5  10.8 
       % change in US$ 25.2 -8.0 21.2 -6.6 9.9  5.6  16.8 
Service imports         % change - national currency 24.6 11.8 5.5 13.1 17.5  5.9  11.5 
       % change in US$ 38.9 0.4 15.6 -17.6 -16.4  7.1  17.5 
International reserves, excl. gold (US$ billion) 1,035.7 2,301.3 2,578.7 3,515.2 3,813.2  5,698. 9  8,450.4 
Total external debt (US$ billion;  end- period) 46.6 74. 0 116.0 168.2 122.7  113.4  117.3 
.. Not available. 
a Estimates. 
Source: Statistics Iceland online information.  Viewed at:  http://www.statice.is.  Central Bank of Iceland online 
 information.  Viewed at :  http://www.sedlabanki.is.  IMF online information, International Financial Statistics 
 Indicators.  Viewed at:  http://www.imf.org/external/country/ISL. 
2. The authorities' policy choices following the crisis , which included capital controls and fiscal 
consolidation, including limiting the cost of ba nk restructuring on public finances, helped the 
economic recovery.  Additionally, funding from the IM F and other Nordic countries helped to shore Iceland WT/TPR/S/273 
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  up the economy (Chapter IV(4)(i)).  Real GDP growth  is estimated to be 3.1% in 2011 and 2.4% in 
2012.1  Growth has been driven by exports, private sector consumption, and gross fixed capital 
formation.2  Private sector consumption grew due to wage increases, temporary stimulus measures, 
such as debt relief because of ille gal foreign-currency-indexed loans3 and pre-payments from pension 
funds, which were allowed after the crisis.  Unemployment has also declined marginally.  
3. For the near term, the goal is to continue to  continue fiscal consolidation and reduce public 
debt so that public finances are on a sustainable trac k.  Capital controls may also need to be lifted 
gradually to avoid misallocation of  resources.  Debt restructuring needs to continue and the large 
overhang of non-performing loans reduced so that  banks can resume their core lending activity.   
4. In the longer term, the challenge would be to su stain growth.  In this respect the authorities 
have identified certain sectors where they feel th at Iceland has a competitive advantage.  These 
include energy-intensive, land-intensive, and knowledge-based industries, as well as tourism.  
However, to attract investment in these sectors ( both domestic and foreign), investor confidence in 
Iceland would have to be restored, especially  following the banking sector restructuring. 
(2) RECENT ECONOMIC DEVELOPMENTS  
(i) Macroeconomic indicators 
5. Leading up to the global financial crisis in 2008, a number of imbalanc es had developed in 
the economy, making Iceland susceptible to exogenous shocks.  The private sector was overstretched 
with both corporations and households being highly le veraged.  Furthermore, much of this debt was 
linked to foreign exchange and indexed to inflation.4  Iceland was also runni ng a large current account 
deficit, inflation was high, and the krona had appr eciated significantly on the back of large capital 
inflows.  In response, the Central Bank initiated a tightening of monetary policy in 2004.  However, 
this only had a limited impact on domestic demand and inflation.  The imbalances led to a significant 
rise in Iceland's foreign risk premium, which resu lted in Icelandic banks being shut out of foreign 
wholesale funding.  The global financial crisis in 2008 exacerbated an already precarious situation, 
resulting in the collapse of the banking system (C hapter IV(4)(i)(a)).  The collapse resulted in an 
erosion of confidence, causing a sharp fall in asset prices, including the housing market, and a 
depreciation of the krona by more than 70%, which disrupted external payment systems and hampered 
trade.  Against this backdrop, the Central Bank 's objective shifted from inflation targeting to 
exchange-rate stability. 
6. As Iceland did not have enough foreign exchange reserves to rely only on foreign exchange 
interventions, the Central Bank also tried to stab ilize the krona through a combination of tighter 
monetary policy, liquidity manage ment, and capital controls.  Capita l controls initiated in late 2008 
included: 
                                                      
1 IMF (2012). 
2 Gross fixed capital formation has been driven by one-off purchases such as airplanes and ships, as 
well as investment in an aluminium smelter.  
3 Iceland's Supreme Court issued a new ruling on the recalculation of  illegal foreign-exchange-indexed 
loans (according to an earlier ruling, these loans must be recalculated retr oactively in krona).  Under the new 
ruling the interest rate charged retroactively on these loans should be the foreign currency interest rate rather than the krona interest rate, even though the loans will be denominated in krona. 
4 OECD (2011).  Approximately 80% of the household debt was inflation indexed and 13% was 
denominated in foreign currencies.  About 70% of corporate debt was foreign exchange linked.   WT/TPR/S/273 Trade Policy Review 
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   restrictions on capital transactions were im posed on residents and non-residents, which 
limited their ability to shift between the krona and foreign currencies; 
 upon maturity, krona-denominated proceeds of fina ncial instruments were not allowed to be 
converted to foreign exchange, instead they had to be reinvested in other krona-denominated 
instruments;  and 
 residents were required to repatriate all forei gn currency they had acquired.  However, firms 
with significant international operations were ex empted if they fulfilled certain criteria.  
Payments pertaining to current account tran sactions and inward FDI were permitted.  
7. In November 2008, the Central Bank tightened m onetary policy and raised the policy rate by 
6% to 18%.5  The above measures, coupled with funds fro m the IMF and Nordic countries, appear to 
have worked as the exchange rate stabilized and infl ation declined sharply (Chart I.1 and Table I.1). 
8. In order to stimulate demand in the economy, the Central Bank started to ease monetary 
policy in 2009, and the policy rate was below 5% by th e end of 2010.  This easing also facilitated debt 
restructuring.  However, inflation picked up, due to rises in energy, food, and import prices and the 
Central Bank responded by shifted back to tightenin g monetary policy.  The challenge for monetary 
policy would be the gradual easing of capital controls  while ensuring exchange rate stability and low 
inflation. 
02468101214
2005 2006 2007 2008 2009 2010 2011020406080100120140Chart I.1
Exchange rate and inflation, 2005-2011
Source: IMF, Iceland Country Report No. 12/89.  Viewed at:  http://www.imf.org/external/country/ISL.ISK/US$
(left-hand scale)
CPI (%)
(right-hand scale)
 
9. With regard to fiscal policy, Iceland ran a surplus between 2004 and 2007.  However, it 
appears that revenues were "artificially elevated  by booming domestic demand, buoyant construction 
and inflated asset prices, suggesting signifi cantly weaker cyclically  adjusted balances."6  The financial 
                                                      
5 The Central Bank had cut the interest rate by 3.5% just two weeks earlier. 
6 IMF (2012). Iceland WT/TPR/S/273 
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  crisis exposed these vulnerabilities and a fiscal surplus of 5.4% of GDP in 2007 turned into a deficit 
of 13.5% in 2008, mostly due to increased expendi ture on account of bank restructuring (Table I.1). 
10. In the aftermath of the global financial crisis  in 2008, the authorities faced the challenge of 
putting public finances on a sustainable path through  a multi-year fiscal consolidation programme that 
would protect Iceland's welfare state.  The problem was particularly acute as the cost of bank 
restructuring was considerable (according to initial estimates the cost would be 53% of GDP, this was 
subsequently reduced to 20%)7, and pursuing a contractionary fiscal policy ran the risk of deepening 
the already severe recession.  
11. As part of the Standby Arrangement with th e IMF, the authorities pursued a supportive    
fiscal stance initially, in order to reduce the risk of  the recession deepening.  Since the second half of 
2009, fiscal policy has been consolidated and the fisc al deficit was reduced by 9% in 2011 to 4.4% of 
GDP.  The reduction in the fiscal deficit was achieved through adjustments in both revenue and expenditures.  All major taxes, including social  security contribution, were increased, while 
expenditure was reduced in many areas, including public administration, education, and healthcare, 
although social benefits were safe guarded.  Despite tighter fiscal policy, public debt as a proportion of 
GDP rose from approximately 29% in 2007 to nearly 100% in 2011 due mainly to bank 
recapitalizations.
8 
12. Fiscal consolidation is continuing, albeit at a slower pace than envisaged.  There have been 
expenditure overruns at the central government level.   However, on the revenue front, legislation that 
will increase the fishing levy has recently been p assed and is expected to raise US$110-120 million.9 
(ii) Balance of payments  
13. Iceland's current account deficit more than halved between 2005 and 2011, from over 16% of 
GDP to about 7% (Table I.2 and Chart I.2), refl ecting a narrowing of the gap between gross national 
savings and gross national investment.  In 2008, the deficit was nearly 25% of GDP as a result of the 
interest payments Icela ndic banks had to make. 
Table I.2 
Balance of payments, 2005-11 
(ISK million) 
  2005 2006 2007 2008 2009 2010 2011 
Current account  -165,756 -278,492 -205,921 -363,602 -174,857 -122,750 -116,101 
   Exports of goods and services 322,957 374,659 451,077 652,839 788,186 861,155 951,410 
   Imports of goods and services 448,257 579,175 583,061 687,445 661,867 706,883 818,536 
   Income and transfer, net  -40,456 -73,976 -73,937 -328,996 -301,176 -277,022 -248,975 
   Balance on goods -93,100 -156,544 -87,977 -6,666 90,278 120,211 96,905 
      Merchandise exports fob 194,934 243,461 306,001 466,859 500,854 561,032 618,843 
       Merchandise imports fob 288,034 400,005 393,978 473,525 410,576 440,821 521,938 
Table I.2 (cont'd) 
                                                      
7 IMF Country Reports , 12/89, 12/90, 12/91, 08/367, 08/368 and 09/306.  Viewed at:  
http://www.imf.org/ext ernal/country/ISL. 
8 Information provided by the authorities. 
9 Information provided by the authorities. WT/TPR/S/273 Trade Policy Review 
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    2005 2006 2007 2008 2009 2010 2011 
  Balance on services -32,200 -47,972 -44,007 -27,940 36,041 34,061 35,969 
      Exports of services, total 128,023 131,198 145,076 185,980 287,332 300,123 332,567 
          Transportation 67,748 58,655 64,294 80,821 130,680 145,190 154,101 
          Travel 26,041 33,803 38,181 53,731 67,709 67,985 81,953 
          Other receipts 34,234  38,740 42,601 51,428 88,943 86,948 96,513 
     Imports of services, total 160,223 179,170 189,083 213,920 251,291 266,062 296,598 
          Transportation 55,525 53,497 56,312 69,425 84,617 76,962 87,510 
          Travel 61,540 75,477 84,329 91,749 66,281 69,493 85,166 
          Other expenditures 43,158 50,196 48,442 52,746 100,393 119,607 123,922 
  Balance on income -38,742 -71,511 -70,069 -325,508 -292,303 -268,427 -240,492 
      Receipts 91,131 181,405 284,842 126,614 94,618  59,921 120,739 
          Compensation of employees 4,639 5,033 1,584 1,458 2,441 2,698 2,456 
          Dividends and reinvested earni ngs 65,023 103,261 139,225 -48,876 46,931 27,235 86,843 
          Interest payments 21,469 73,111 144,033 174,032 45,252 29,988 31,440 
      Expenditures 129,873 252,916 354,911 452,122 386,927 328,348 361,231 
          Compensation of employees 1,533 2,728 3,443 2,493 2,260 797 696 
          Dividends and reinvested earni ngs 66,606 83,515 69,889 -51,000 71,778 108,254 115,651 
          Interest payments 61,734 166,673 281,579 500,629 312,889 219,297 244,884 
 Current transfer, net -1,714 -2,465 -3,868 -3,488 -8,873 -8,575 -8,483 
Capital and financial account 138,829 401,438 250,819 1,137,128 -250,354 350,541 97,276 
  Capital transfer, net -1,697 -1,775 -1,900 -1,032 -1,451 -426 -33 
  Financial account  140,526 403,213 252,719 1,138,160 -248,903 350,967 97,309 
      Financial account excl. reserves 145, 246 488,650 259,414 1,238,8 39 -218,838 588,945 436,101 
          Direct investment, net -252,520 -118,627 -215,298 450,846 -272,748 318,217 132,214 
              Abroad -446,548 -388,312 -652,435 370,171 -283,362 288,180 14,734 
              In Iceland 194,028 269,685 437,137 80,675 10,614 30,037 117,480 
          Portfolio investment, net 767,684 800,578 -574,534 225,267 1,192,527 1,315,240 -967,312 
              Assets -294,985 -204,661 -606,577 431,295 151,468 -6,183 -112,855 
                  Equities - 205,576 -67,382 - 289,336 167,868 41,914  115,149 9,381 
                  Debt securities -89,409 -137,279 - 317,241 263,427 109,554 -121,332 -122,236 
              Liabilities 1,062,669 1, 005,239 32,043 -206,028 1, 343,995 1,309,0 57 -854,457 
                  Equities 5, 267 81,205 12,543 -161,506  -1,488 -10,645 237 
                  Debt securities 1,057,402 924,034 19,500  -44,522 1,342,507 1,298,412 -854,694 
          Financial derivatives, net 0 0 0 0 0 0 0 
          Other investment, net -369,918  -193,301 1,049,246 562,726 1,246,437 1,585,968 1,271,199 
              Assets -686,669 -777,756 1,077,575 -212,986 -117,570 282,287 517,511 
              Liabilities 316,751 584,455 2,126,821 775,712 1, 364,007 1,303,681 753,688 
      Reserve assets -4,720 -85,437 -6,695 -100,679 -30,065 -237,978 -338,792 
Net errors and omissions 26,927 -122,946 -44,898 -773,526 425,211 -227,791 18,825 
Source : Central Bank of Iceland online information.  Vi ewed at:  http://www.sedlabanki.is/?PageID = 548 
 [28/02/2012] . 
14. The reduction in the current account deficit since 2008 is the result of the trade deficit turning 
into a surplus and, more importantly, interest pa yments being halved.  The latter is due to the 
reorganization of the banking sector as Icelan dic banks stopped making interest payments 
(Chapter IV(4)).  At the same time exports of goods and services have been increasing (both in ISK 
and volume terms) steadily since 2005.  The annual changes in the value of imports have been more 
volatile, with a sharp reduction in 2009 and relatively low growth since then. Iceland WT/TPR/S/273 
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  15. The capital and financial account surplus declin ed from approximately US$2.2 billion in 2005 
to US$839 million in 2011 although with  considerable year-to-year fluctuations.  The surplus peaked 
at nearly US$13 billion in 2008 before turning into a deficit in 2009.  The reason for the surge in the 
surplus was an increase in net direct investment as well as portfolio investment.  In the aftermath of 
the financial crisis, both direct investment and por tfolio investment recorded outflows as investor 
confidence was eroded. Furthermore, in the case of th e latter, bank restructuring resulted in repayment 
of debt securities. 
16. Measures taken by the authorities (particularly capital controls, bilateral loans, and IMF 
funding) resulted in a rise in foreign exchange reserves, from slightly over US$1 billion in 2005 to 
nearly US$8.5 billion in 2011, which represents  approximately two years of import cover. 
2005 2006 2007 2008 2009 2010 20110100,000200,000300,000400,000500,000600,000700,000800,000900,0001,000,000 Services imports, total
Merchandise imports f.o.b.
Services exports, total
Merchandise exports f.o.b.Chart I.2
Imports and exports of goods and services, 2005-11
Source: Central Bank of Iceland online information.  Viewed at:  http://www.sedlabanki.is/?PageID=548.ISK million
 
(3) DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
17. Iceland's economy has always depended on trade, and trade has increased in importance over 
the past six years.  Following a reduction in imports and exports in 2009, both started to recover in 
2010, and exports exceeded their pre-crises level in krona terms in 2011.  However, in U.S. dollar 
terms exports declined.  In 2011, the share of me rchandise exports in GDP was 38%, double the share 
in 2005.  The share of merchandise imports also in creased during the same period, albeit not as much 
as exports, to 32% of GDP from 28%.  Furthermore, the services balance turned from a deficit of 3.1% of GDP to a surplus of 2.2%. 
(i) Composition of trade 
18. Despite the financial crisis, the composition of Iceland's exports did not change dramatically 
during the period under review:  exports of primar y products in total merchandise exports increased WT/TPR/S/273 Trade Policy Review 
Page 8 
  
  from approximately 80% in 2005 to 85% in 2011 as a result of high prices for fish and aluminium 
(Chart I.3).  Within primary products, the share of  agricultural, fish, and food products declined, while 
the share of aluminium products more than double d as a new aluminium plant came online in 2008 
(Table AI.1).  The share of ma nufactures declined from over 19% in 2005 to 14% in 2011.  Within 
manufactures the decline was due to reduced expor ts of machinery and transport equipment.  
19. The share of primary products in total mercha ndise imports nearly doubled from 22.6% in 
2005 to 41.4% in 2011.  Within primary products , both fishing and bauxite for aluminium production 
registered increases on account of raw material import s for the new aluminium plant (Table AI.2).  In 
contrast, the share of manufacturing in total merchandise imports fell from over 77% in 2005 to 
58.4% in 2011.  Within manufactures, imports of automotive product declined sharply. 
(ii) Direction of trade 
20. Iceland's main export destination in 2011 remained the EU27 followed by other EFTA 
countries and the United States.  The shares of the EU27 and EFTA increased during the review 
period, while the share of the United States halved , and that of Asia as a whole also declined 
(Chart I.4 and Table AI.3).  
21. The EU27 remains Iceland's largest import supp lier followed by EFTA and the United States.  
During the period under review, the EU27 share decreased , as did that of Asia as a whole, while the 
shares of Brazil and EFTA rose (Table AI.4).  
(iii) Foreign direct investment 
22. Inward FDI flows were volatile during the peri od under review.  FDI inflows peaked at over 
ISK 437 billion in 2007 (33% of GDP) up from ISK 193 billion in 2005 (19% of GDP).  However, 
FDI has declined drastically since then and was approximately ISK 30 billion in 2010 (2% of GDP).  As a result, the stock of FDI in Iceland was ISK 1,356 billion in 2010 (88% of GDP).  The surge in FDI was due to investment in the aluminiu m and related industries, which accounted for 
approximately 55% of the FDI stock in 2010.  The other major recipients were holding companies, 
which benefited from the low corporate tax in Iceland.  The decline in FDI flows is due mainly to loss 
of investor confidence after the 2008 financial crisis.  
23. The main investor in Iceland is Luxembourg ( 81% of FDI stock), followed by other Nordic 
countries (Norway and Denmark), and the Netherlands.  Most of the FDI in Iceland takes the form of 
inter-company loans;  and Luxembourg has a larg e banking industry and a large cross-border fund 
administration industry.   
 
 Iceland WT/TPR/S/273 
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  Chart I.3
Product composition of merchandise trade, 2005 and 2011
2005 2011
(a)    Exports (f.o.b.)
Total:   US$3,090.5 million Total:  US$5,348.8 million  
(b)    Imports (c.i.f.)
Electrical machines
12.3Chemicals
7.8
Aluminium oxide
2.2
Manufactures
77.3Other consumer
goods
10.7Non-electrical 
machinery
11.0Other mining
1.9
Textiles & clothing
4.0Other
0.2Machinery & 
transport equipment
4.6
Other 
semi-manuf.   
8.3
Transport equipment  
8.2Chemicals
9.3
Manufactures
58.4
Non-electrical
machinery
5.3
Total:   US$356.8 billion Total:   US$524.4 billion Per cent
Other consumer
goods  
7.7Other
0.1Machinery & 
transport equip.
9.3 Iron & steel
3.9
Source :  UNSD, Comtrade database.Mining
29.8Other 
7.2Fish products
41.7
Other semi-
manufactures
12.9Iron & steel
3.1
Agriculture
11.6
Transport equipment
18.6Mining
13.5Aluminium 
oxide
11.9Chemicals 
3.5Chemicals
3.0Other 
7.7
Other mining
3.5Fuels
14.4Fish products 
57.9
Aluminium & alloys thereof
18.5Aluminium & alloys 
thereof
39.6
Agriculture
9.1
Textiles & clothing
3.6
Electrical machines
16.1Fuels
9.4
 WT/TPR/S/273 Trade Policy Review 
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  Chart I.4
Direction of merchandise trade, 2005 and 2011
2005 2011
(a)    Exports (f.o.b.)
Asia  
5.0
Total:  US$3,090.5 million Total:  US$5,348.8 million
(b)    Imports (c.i.f.)
Other Asia  
8.8
Germany
7.9
Other EU27
15.4Switzerland
2.0Other
8.2United States
10.9
Total:  US$4,978.9 million Total:  US$4,845.8 millionPer cent
Asia
11.3Asia
4.7
Germany
15.0Other
7.5
Sweden
3.9United States
8.9
Other Asia 
5.0United States
3.7
Source :  UNSD, Comtrade database.Norway
15.9United Kingdom
17.8
EFTA
17.9EFTA
8.8Norway
7.0
United Kingdom  5.8Germany
15.8Other
8.2
Netherlands
32.4
China
6.3EFTA
3.9
Other EU27
14.2
Switzerland
1.9EFTA
5.1Netherlands
12.5
United Kingdom
9.0Spain
3.9
Germany
13.8Brazil
5.8
Other EU27
22.1China
5.1Spain
7.4
Denmark
6.2EU27
62.1 EU27
46.0 Denmark
7.1
Sweden
8.4Netherlands
7.4United States
9.3Other
5.8Other EU27
16.9
France
3.9EU27
78.3
Denmark
4.2EU27
74.6
Netherlands
4.8
United Kingdom
5.2Asia
13.9