Foreign Trade

Bilateral Trade Relations Iceland - Germany

Bilateral trade relations between Iceland and Germany are close, and trade volume more than doubled within a 10 years period. Germany is the second largest single trade market for Iceland's economy. Germany has been the number one importer of goods to Iceland for many years, and the number two export market for Icelandic products and goods. Trade balance has been positive for years, with a slight surplus.

Exports. In 2004, Germany accounted for 16.4 percent of total Icelandic exports, in total figures 33.881 Mill ISK (fob). Icelandic exports to Germany base on a few pillars. These are aluminium, accounting for about 64% of total exports to Germany, and fish and seafood, accounting for about 21% of total exports to Germany. Exports of medical and medicinal products registered a solid growth in the past few years, nowadays accounting for about 10% of Icelandic exports to Germany. The share of aluminium exports versus fish exports to Germany, and change in the past decade, is remarkable. In 1993, fish and seafood accounted for about 65 percent of total export value to Germany, compared to about 21 percent ten years later. Nonetheless, seafood remains highly important as a sector contributing to the German economy, and has a spin-off effort on other Icelandic exports included under other export categories; such as equipment to the food industries, software, knowhow. Germany has been the key European consumer market for redfish, and Iceland is an important supplier, with frozen red fish fillets being the leading product group. Other important species to the German market are saithe, capelin, cod, herring, shrimp, Greenland halibut, and some other pelagic and demersals. In 2004 the key export species to the German market were redfish, followedby herring and shrimps.

Imports from Germany accounted for 12.7 percent of total imports to Iceland in 2004, in total figures 30,623 Mill ISK (fob). Key commodities are consumer investment goods such as electrical and household devices, vehicles, electrotechnical equipment, fuels, lubricants and natural gas, machinery and transport equipment, chemical products and paperboard.

Tourism is blooming and has become a pillar of Iceland´s economy and the bilateral relations. Germany is the third leading single market for Iceland's tourism industries with regard to the number of tourists. Germany accounts for about 11,7 percent of all tourists to Iceland, in total figures, about 32.000 - 40.000 German tourists visit Iceland each year. In terms of  length of stay, and overnight stays in hotels and guesthouses, Germany is leading with about 163.700 overnight stays, followed by tourists from the UK and the USA.

Direct foreign investments are negligible, and remain a challenge for both sides.