Iceland’s population rose by 11,500 in 2022, potentially reaching 400,000 this year, according to a report from the Housing and Construction Authority. The proportion of working immigrants in the national labour market has quadrupled since 2003.
On course to reach 400,000 by end of the year
Iceland’s population increased by 11,500 last year, marking the most significant growth since records began. According to a monthly report of the Housing and Construction Authority, this growth trend has continued in 2023; in the first six months of the year, the country’s population increased by 1.7%. If this trend continues, the increase this year will surpass last year’s, with Iceland’s population reaching 400,000 by year-end.
The report also notes that foreign nationals currently compose nearly 18% of the population or over 70,000 individuals. Furthermore, foreign nationals constitute about 30% of the age group between 26-36 years. The institution notes that, based on tax data, the proportion of working immigrants in the Icelandic labour market has quadrupled since 2003, rising from just over 5% to over 20% last year.
In an interview with RÚV yesterday, Katrín Ólafsdóttir, an associate professor at the University of Reykjavik, stated that since the tourism sector began its rapid growth, there had been a strong correlation between Iceland’s economic growth and the number of foreign nationals: “The correlation was much weaker in the years before, but the last ten years show a very strong link.”
Foreign nationals nearly 50% of the unemployed
While working immigrants in the Icelandic labour market have quadrupled since 2003, the proportion of foreign nationals among the country’s unemployed population has also seen a sharp increase in recent years, now reaching nearly 50%.
Speaking to RÚV, Unnur Sverrisdóttir, Head of the Directorate of Labour, expressed concerns about this trend, noting that various measures had been tried without the desired success. Unnur speculated that several factors may be contributing to the trend, including language proficiency and challenges related to childcare, especially for single mothers who might not have the same support system as native Icelanders.
Unnur also emphasised the need for a better understanding of the issue and highlighted potential gaps in educational opportunities for younger foreign nationals in Iceland, especially those who aren’t proficient in Icelandic.