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Sponsored LinksTravel reviews & great deals at TripAdvisor: EconomyAbout 15% of the land is potentially productive, but agriculture, cultivating mainly hay, potatoes, and turnips, is restricted to 0.5% of the total area. Fruits and vegetables are raised in greenhouses. There are extensive grazing lands, used mainly for sheep raising, but also for horses and cattle. Fishing is the most important industry, accounting for 20% of the gross national product (GNP) and 75% of the country's exports. Aside from aluminum smelting and ferrosilicon production, Iceland has little heavy industry and relies on imports for many of the necessities and luxuries of life. More than half of Iceland's GNP comes from the communications, trade, and service industries. Tourism is also important. Most trade is with Great Britain, Germany, the Scandinavian countries, and the United States. In 1990, Iceland's per capita national income was higher than the average for Europe. The country experienced a recession from the late 1980s into the early 1990s, as fish stocks dwindled and world prices for fish and aluminum dropped. However, the economy stabilized in the 1990s and the government continued its policies of diversifying the economy and expanding hydroelectric and geothermal energy resources, thus reducing dependence on oil imports. (Roughly 90% of all homes are now heated by geothermal energy.) Sections in this article: The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2007, Columbia University Press. All rights reserved.
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