Economic Activities in Iceland: Primary, Secondary, Tertiary, and Quaternary

Iceland, with a population of about 386,506 as of 2024 (World Bank, 2024), is one of the least populous countries in the world. Located in the North Atlantic Ocean, Iceland covers a total area of 103,000 square kilometers, ranking 102nd globally, slightly smaller than Guatemala.

As of 2024, Iceland’s GDP stands at approximately $33.26 billion, while its GDP per capita is among the highest in the world at about $86,040 (World Bank, 2024). Despite its small economy by total output, Iceland consistently ranks among the top nations globally for GDP per capita.

Despite its relatively lower rankings, Iceland’s economy is stable and diversified, with a strong focus on industries such as tourism, renewable energy, and fisheries. The country’s small population and high standard of living contribute to its overall economic resilience.

What are the economic activities of Iceland?

• Primary activities: 5.8% of GDP.
• Secondary activities: 19.7% of GDP.
• Tertiary activities: 74.6% of GDP.

Primary Sector of Iceland

Iceland’s primary sector, particularly its agricultural activities, is influenced by its cool climate and abundant natural resources. With 18.57% of the land dedicated to agriculture, the country produces a variety of products including milk, chicken, barley, lamb/mutton, potatoes, pork, beef, eggs, other meats, and cucumbers/gherkins.

Despite contributing only 5.8% to the GDP, agriculture plays a crucial role in Iceland’s economy by providing a diverse range of crops and animal products essential to the country’s food security and rural livelihoods.

Iceland’s geological diversity, with its volcanic activity and abundant water sources, provides a rich array of natural resources. The primary sector thrives on fish, hydropower, geothermal power, and diatomite, driving the economy through sustainable utilization and exportation of these valuable assets.

Secondary Sector of Iceland

What is the secondary sector or what are secondary activities?The secondary sector encompasses industries that transform raw materials into finished products for consumption. In Iceland, main industrial products include fish processing, aluminum smelting, geothermal and hydropower, and medical/pharmaceutical products. These industries play a crucial role in the country’s economy and export market.Manufactures in Iceland’s total exports are not a significant contributor, accounting for only 15.48% in 2023. The country’s economy relies more on other sectors for export revenue.

Tertiary sector of Iceland

What is the tertiary sector or what are tertiary activities?The tertiary sector in Iceland involves providing intangible goods such as advice, expertise, and services to improve productivity and meet needs. Main activities include restaurants, healthcare, education, banking, communication, media, tourism, and transportation.Among these, Iceland’s thriving tourism industry is pivotal to its economy, contributing significantly to its GDP. With approximately 2.3 million foreign visitors in 2024 (Icelandic Tourist Board, 2024), surpassing its population several times over, destinations like the Blue Lagoon and Reykjavik’s vibrant capital attract visitors from around the globe, fueling economic growth and employment opportunities.Another example of tertiary economic activity is the mobile cellular economic sector, which boasts around 457,000 subscriptions, enhancing connectivity. This robust infrastructure supports technological advancements and innovation across various industries.

Biggest company in Iceland

Which is the biggest company in Iceland? Among the largest companies headquartered in Iceland is Icelandair Group, the national airline and travel group, with annual revenue of roughly $1.5 billion (Icelandair Group). Marel hf., the food-processing equipment maker long considered Iceland’s flagship company, was acquired by U.S.-based JBT Corporation and delisted from Nasdaq Iceland in January 2025, becoming part of JBT Marel Corporation (Marel/JBT).

International Trade of Iceland

Import Activities of Iceland

Iceland’s goods imports totaled about $9.47 billion in 2024, equivalent to roughly 28% of its GDP (World Bank WITS, 2024).Iceland’s main import partners are Norway, Netherlands, Denmark, Germany, and China. The country imports refined petroleum, aluminum oxide, cars, carbon-based electronics, and aircraft.

Exports Activities of Iceland

Iceland’s goods exports in 2024 amounted to about $6.81 billion, equivalent to roughly 20% of its GDP (World Bank WITS, 2024). When services such as tourism are included, total exports of goods and services reach around 42% of GDP, underscoring their importance to Iceland’s economic growth and stability.Iceland’s export activities primarily focus on fish, aluminum, iron alloys, aluminum wire, and animal meal. The country’s top export partners are the Netherlands (27%), the UK (9%), the US (8%), Germany (8%), and France (6%).

Iceland economy challenges in 2024

In 2024, Iceland faces challenges with its high-income economy reliant on tourism, fishing, and aluminum. Volcanic activity and demand swings threaten these industries. Inflation is above target, hindering economic diversification. Barriers to foreign business access persist, limiting growth potential.

Sources

t
• World Bank: Iceland
t
• IMF: Iceland
t
• CIA World Factbook: Iceland
t
• World Bank WITS: Iceland Trade
t
• Icelandic Tourist Board: Visitor Numbers

Last updated: June 20, 2026