D 930making it the world's oldest parliament

It also saw inflation for 2009 at 13.1 percent, comparedto its October forecast of 5.7 percent. The government said it expected the current accountdeficit, currently an estimated 22 percent of GDP, to reverse toa 6.1 percent surplus this year and to 5.6 percent in 2010.Unemployment was seen rising to an average of 7.8 percent in2009 and rising even further in 2010, to 8.6 percent. Prime Minister Haarde had warned of "national bankruptcy"and said at the end of last year that the financial crisis whichravaged the banking system and the crown currency underscoredthe pitfalls of managing a currency in a small, open economy. The International Monetary Fund (IMF) approved a $2.1billion loan for Iceland on Nov.

19 as part of a package ofassistance which totalled about $10 billion. Iceland's major banks and its currency had collapsedunder the weight of billions of dollars of debt accumulated inan aggressive overseas expansion into financial services. Investors took largepositions in its high-yielding currency and foreign firms andindividuals poured money into local projects. Before the banking sector was deregulated in the late1990s, the economy was based mainly on fishing, and marineproducts accounted for the majority of exports. Important exports now include aluminium, ferro-siliconalloys, equipment and electronic machinery for fishing and fishprocessing, and pharmaceuticals. Before the crisis, Icelandic businesses had targetedinvestments in the retail and financial sectors in Britain andthe Nordic region and in the telecoms and pharmaceutical sectorsin Eastern Europe. THE COUNTRY - SOME DETAILS: CAPITAL - Reykjavik POPULATION - 320,000 ETHNICITY - Some 96 percent of Icelanders are descendants ofNorwegian, Scottish and Irish immigrants RELIGION - 92 percent of Icelanders are Lutheran.

There aresmall minorities of other Protestants and Roman Catholics. LANGUAGE - Modern Icelandic is closely related to Old Norse,the language of the original Viking settlers. The Althingi traces its originsto the assembly established by Viking settlers in A.D 930,making it the world's oldest parliament. SOME HISTORY: The Vikings' independent commonwealthcollapsed in the 13th century when the island came under therule of Norway and, later, Denmark. Granted home rule in 1918,the Icelanders finally broke from the Danes after the Nazioccupation of Denmark in April 1940. Following a referendum, theRepublic of Iceland was proclaimed in June 1944 AREA - 103,100 sq km (39,810 square miles) Four-fifths ofthe island is uninhabited.