The Overleveraged Economy of Iceland | Economics Explained

Iceland's economy is unique due to its small population and reliance on natural resources like geothermal energy. Despite its small size, Iceland has a significant industrial sector, particularly in aluminium production, thanks to cheap electricity. The country faced a major financial crisis in 2008 due to an overgrown banking sector, but it recovered through government intervention and a boom in tourism. However, the COVID-19 pandemic has again challenged its economy, highlighting its dependence on tourism.

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