economic groth of Iceland
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Size and income level
The Icelandic economy is the smallest within
the OECD, generating GDP of 7.5 billion in
2002 in terms of Purchasing Power Parities
(PPP). This was less than 1/1200 of the US
economy, 1/20 of the Danish economy and 1/3
of the economy of Luxembourg but 1/3 larger
than the economy of Malta. The small size of
the Icelandic economy mainly reflects the
small size of the population, which was only
288 thousand at the end of 2002.
Iceland's small population has not inhibited
economic growth and prosperity. The country
has all the characteristics of a modern welfare
state. GDP per capita measured in terms of
Purchasing Power Parities (PPP) amounted to
26,386 (in 2002), the sixth highest in the
world. In comparison to the Nordic countries,
Iceland's GNI per capita is lower than in
Norway and Denmark, but higher than in
Sweden and Finland and somewhat above the
EU average.
This prosperity can be attributed to
Iceland's ability to utilise its comparative
advantages by exploiting its abundant natural
resources, both marine and land-based, as well
as human capital. The location and geology of
Iceland determine its main resources which
are marine resources from some of the richest
and cleanest waters in the world and hydro
and geothermal energy...