Iceland was affected by the 2008 financial crisis more than any other European state, as its financial sector virtually collapsed. In 2020 Reykjavik again faced the economic crisis triggered by the coronavirus pandemic, which, according to government forecasts, should have caused the largest decline in GDP and exports of goods and services for half a century. In this article, the author intends to explore the history of formation and the current state of the Icelandic economy, as well as the state policy on the development of its main export industries – fishing, aluminium production and tourism. The paper also provides an assessment of the nature of the new economic crisis impact on the country’s key industries and of the prospects for recovery and further growth of the economy after quarantine restrictions removed. The current crisis has less affected the Icelandic fishing and aluminium industry, which are quite stable and provide production volumes close to its maximum values, but has severely hit its tourism, as the industry has lost more than 2/3 of the export earnings. However, the decline in number of tourists began even before the pandemic and was due to the fact that Icelandic air companies lost about 53% of their maximum carrying capacity. Nevertheless, the crisis created preconditions for the early recovery of the Icelandic tourism industry: national currency got weaker, the unemployment grew, the cost of labor decreased, but, unlike during the 2008 crisis, the tourism infrastructure was actively developing. In conclusion, the author suggests that the crisis will push Iceland to look for new sources of economic growth, which could be based on developing energy and science intensive industries (e.g. data centers, crypto mining farms, bioengineering and biomedicine centers, etc.). Moreover, the growing US-China rivalry over influence on Iceland could contribute to the latter’s economic development, as historical analysis shows that Reykjavik is more than able to competently use the contradictions between states pursuing great-power politics in order to obtain certain economic benefits.