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Iceland Mag

Economy

Tourism generated 8.4-10% of Icelandic GDP in 2016

By Staff

  • Glymur waterfall At the end of the day 8.4% of Icelandic GDP is generated by spectacular views and otherworldly landscapes - and the foreign travellers who come to enjoy them! Photo/Tryggvi

In less than ten years tourism has become a major contribution to economic growth in Iceland. According to newly released preliminary data from Statistics Iceland tourism contributed 8.4% of the GDP of Iceland in 2016. In comparison, tourism share of GDP was 6.7% in 2015 and 5.6% in 2014. Other estimates put this figure at 10% in 2016, and 12% in 2017.

Tourism a major pillar of the economy

Tourism contribution to GDP

A growing industry Tourism has grown rapidly since 2010. Photo/Statistics Iceland

Statistics Iceland notes that the growing importance of tourism has necessitated a regular calculation and publication of statistics outlining its contribution to the national economy. These figures are somewhat problematic, however, as Statistics Iceland points out, as tourism does not exist as an industry in standard industrial classification. Instead, tourism as an industry is assembled from a proportion of activities of multiple other industries, including services and retail. 

Read more: Icelandic tourism experiences largest growth of any European country

Calculations by Statistics Iceland suggest tourism has become one of the largest industries in Iceland, contributing more to GDP than both industry and fishing. Only retail and commerce (other than tourism) are larger than the travel industry.

This problem means it can be difficult for economists to arrive at a firm and reliable figures on the size of tourism. Economists at Arion bank recently made their own calculations (pdf), arriving at a significantly higher estimate than Statistics Iceland. According to the estimates from Arion bank tourism contributed 10% of the GDP of Iceland in 2016. This year, Arion bank estimates that tourism will contribute 12% of the GDP. 

Arion bank estimates also that in the absence of tourism GDP would have grown by 4.1% last year, instead of the 7.4%. 

Tourism contribution to GDP

A major industry Tourism's contribution to GDP compared to other industries Photo/Statistics Iceland

 

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