Macroeconomic Outlook Report: Iceland

Macroeconomic Outlook Report: Iceland

Summary

Financial intermediation, real estate, and business activities contributed 24.1% to the gross value added (GVA) in 2024, followed by mining, manufacturing, and utilities with 15.3%, and wholesale, retail, and hotels with 13.3%. According to GlobalData estimates, the three sectors are expected to grow by 5.0%, 4.9%, and 6.5%, respectively, in 2025.

According to GlobalData estimates, Reykjavik accounted for 57.7% of Iceland’s GDP and was home to 61.4% of the country’s population in 2024.

Key Highlights

According to the Icelandic government, $6.5 million was allocated in 2024 for infrastructure improvements at major natural and cultural heritage sites, including Geysir, Gullfoss, and Látrabjarg cliffs. The plan, part of a broader $19.5 million investment through 2026, includes 102 projects, with 62 new initiatives focused on trail construction, signage, and parking upgrades. Notable projects include major developments at Geysir ($1.2 million), parking at Látrabjarg ($363,000), and walkway enhancements at Dettifoss and Gullfoss.

Scope

• Macroeconomic Country Outlook Reports evaluate a country's investment potential through its political, economic, social, technological, legal, and environmental (PESTLE) framework.
• This comprehensive analysis offers a holistic view of the economy, serving as a strategic tool to understand market dynamics, business potential, and operational direction. Each PESTLE factor is examined based on four parameters: current strengths, current challenges, future prospects, and future risks.
• These insights support strategic planning by highlighting opportunities and risks within the economy, helping businesses and investors make informed decisions.
• The report aims to provide a detailed understanding of the country's macroeconomic environment to facilitate effective decision-making and strategy development.

• Macroeconomic Outlook Report identifies the potentials of the country as an investment destination by analyzing the political, economic, social, technological, legal and environmental (PESTLE) structure.
• PESTLE Insights provides 360 degree view of the economy which can be used as a strategic tool to understand the market dynamics, business potentials and direction of operations
• Along with providing the country’s snapshot, the report captures the risk factors pertaining to the macroeconomic risks, political environment, legal environment, demographic and social structure effectiveness, technology & infrastructure and natural and geographic aspects that might impact business.
• This report also highlights key clusters/cities which contribute significantly to the country GDP and population along with major companies’ presence in these areas.