Geography

Iceland is located in the North Atlantic between Norway, Scotland and Greenland. It is the second-largest island in Europe and the third largest in the Atlantic Ocean, with a land area of some 103 thousand square kilometres, a coastline of 4,970 kilometres and a 200-nautical-mile exclusive economic zone (EEZ) extending over 758 thousand square kilometres in the surrounding waters.

Iceland enjoys a warmer climate than its northerly location would indicate because a part of the Gulf Stream flows around the southern and western coasts of the country. In Reykjavík, the capital, the average temperature is nearly 12°C in July and just below zero in January. Iceland is mostly mountainous and of volcanic origin, with the highest peak reaching 2,110 metres. Lowlands stretch from the coast towards the interior, mainly in the south and the west. Several glaciers, one of them the largest in Europe, distinguish the landscape. The coasts are rocky and of irregular outline, with numerous fjords and inlets, except for the south where there are sandy beaches with no natural harbours. Only around 20% of the total land area is classified as arable land, most of it located in the southern and western part of the country and several fertile valleys stretching from the coast.

Iceland is endowed with abundant natural resources. These include the fishing grounds around the island, within and outside the country’s 200-mile EEZ. Furthermore, Iceland has abundant hydroelectric and geothermal energy resources, which are still a long way from being fully harnessed.

With only 3 inhabitants per square kilometre, Iceland is one of the least densely populated countries in Europe. On January 1, 2008, the population of Iceland was 313,376. The annual rate of population growth over the period 1996-2006 was 1.49%. Around 63% of the population (about 196 thousand) live in the capital city of Reykjavík and its surrounding municipalities. The largest town outside the capital area is Akureyri, located in North Iceland, with a population of 17,253. Most of the remainder live in small towns along the coast.

Economy of Iceland,Central Bank of Iceland