Fjárhagsstjórnun

Fjárhagsstjórnun is the Icelandic term for economic management or the administration of an economy. It encompasses the planning, directing, and evaluating of financial resources at both public and private levels. The concept originated in the early twentieth century as Iceland moved from a largely agrarian society to a modern, diversified economy. During this period, the state began to play a larger role in coordinating industrial development, stabilising the currency and regulating trade.

Key functions of fjárhagsstjórnun include fiscal policy, monetary policy, exchange‑rate management and regulatory oversight. The Ministry of Finance and Economic Affairs is the principal governmental body responsible for setting the budget, collecting taxes and supervising public expenditure. The Central Bank of Iceland conducts monetary policy, maintains price stability and operates the foreign exchange market. Coordination with the European Economic and Monetary Union has drawn Iceland toward EU standards, despite not being a member.

Internationally, fjárhagsstjórnun is comparable to fiscal‑policy institutions in other European countries, yet Iceland’s small‑size economy and reliance on fisheries, renewable energy and technology give it distinct priorities. The academic study of fjárhagsstjórnun is a growing field within Icelandic universities, providing policy research for both the government and the private sector.