Foreign Nationals Face Far Higher Unemployment in Iceland

2026-03-03 - 12:16

Iceland’s Prime Minister has highlighted stark differences in unemployment rates between Icelandic and foreign citizens. As reported by RÚV, she described the situation as unusual and challenging for policymakers during an impromptu question session at Alþingi. What's the Story? Unemployment at 7.3% nationwide, 10% among foreign nationals and barely measurable among Icelandic citizens, according to Statistics Iceland Figures discussed by Prime Minister Kristrún Frostadóttir during impromptu question time at Alþingi Inflation steady at 5.2% between January and February; fiscal plan due in early April The city skyline at dusk. Photo: Diego Delso. Wikimedia Commons. Public Domain. Dual unemployment gap During the session, Kristrún Frostadóttir said unemployment among foreign nationals stands at around 10%, while it is “barely measurable” among Icelandic citizens. Overall unemployment is 7.3%, according to Statistics Iceland, the lowest level since the Covid-19 pandemic. Inflation remained at 5.2% between January and February. “There’s 10 percent unemployment among foreign nationals, 10 percent, and there’s barely measurable unemployment among Icelandic citizens. This means that traditional economic policy tools are reaching individuals in different ways. These are new circumstances that we find ourselves in.” The Prime Minister said she was not satisfied with the latest figures and that fiscal restraint would be reflected in the government’s fiscal plan due in early April. She also noted that Fitch Ratings had recently upgraded the Treasury’s credit rating. Opposition leaders questioned the government’s economic approach. Guðrún Hafsteinsdóttir said: “Stability and living standards cannot be bought in discount stores in Brussels. We need to take action at home and take a firm grip on economic policy.” Coverage of Iceland’s economic outlook relating to foreigners in the job market has previously been reported by Iceland Review.