For the past two years, population increase in Iceland has been higher than in any other country in Europe. Population increased by 2.6% in 2006 and by 1.9% in 2006 as compared to 0.9% during the last decade of the twentieth century. Earlier, population increase in Iceland can mainly be explained by relatively high fertility rates. In recent years immigration has gained pace. In 2006, net international migration amounted to no less than 17.3 per 1,000 inhabitants. Immigration rates were slightly lower in 2007 (net international migration 9.9 per 1.000 inhabitants). Net international migration rates have been prone to fluctuations. However, no year prior to 2005 net international migration rate was higher than 6.1 (in 2000).

The geographical mobility of the Icelandic population is pronounced.  Internal migration rate amounted to 186.9 per 1,000 population, as compared to 167.8 in 2006. Net gains were most pronounced in areas in the vicinity of the capital region.