The legislative election takes place after the collapse of a fragile coalition, with the economy being a top concern.
Icelanders are electing a new parliament after disagreements over the economy, immigration, and the fallout from volcanic eruptions forced Prime Minister Bjarni Benediktsson to pull the plug on his coalition government and call an early election.
Saturday’s election is Iceland’s sixth general election since the 2008 financial crisis devastated the economy of the North Atlantic island nation and ushered in a new era of political instability.
Opinion polls suggest the country may be in for another upheaval, with support for the three governing parties plunging.
Benediktsson, who was named prime minister in April following the resignation of his predecessor, struggled to hold together the unlikely coalition of his conservative Independence Party with the centrist Progressive Party and the Left-Green Movement.
Harsh weather in the sub-Arctic nation threatened to hamper some voters getting to polling stations on Saturday, with heavy snow blocking roads in many areas.
The weather could also delay the delivery of ballot boxes to counting centres after polls close at 10pm (22:00 GMT).
Ten parties compete
Voters will choose 63 members of the Althingi – parliament – in an election that will allocate seats both by regional constituencies and proportional representation.
Parties need at least 5 percent of the vote to win seats in parliament. Eight parties were represented in the outgoing parliament, and 10 parties are contesting this election.
Turnout is traditionally high by international standards, with 80 percent of registered voters casting ballots in the 2021 parliamentary election.
A windswept island near the Arctic Circle, Iceland normally holds elections during the warmer months of the year.
But on October 13, Benediktsson decided his coalition could not last any longer, and he asked President Halla Tomasdottir to dissolve the Althingi.
The splintering of Iceland’s political landscape came after the 2008 financial crisis, which prompted years of economic upheaval after the country’s debt-swollen banks collapsed.
The crisis led to anger and distrust of the parties that had traditionally traded power back and forth and prompted the creation of new parties ranging from the environment-focused Left-Green Alliance to the Pirate Party, which advocates direct democracy and individual freedoms.
Like many Western countries, Iceland has been buffeted by the rising cost of living and immigration pressures.
Inflation peaked at an annual rate of 10.2 percent in February 2023, fuelled by the fallout from the COVID-19 pandemic and Russia’s invasion of Ukraine.
While inflation slowed to 5.1 percent in October, that is still high compared with neighbouring countries.
The US inflation rate stood at 2.6 percent last month, while the European Union’s rate was 2.3 percent.
Public finances have also been strained by repeated eruptions of a volcano in the southwestern part of the country, which have displaced thousands of people.
One year after the first eruption forced the evacuation of the town of Grindavik, many residents still do not have secure housing, leading to complaints that the government has been slow to respond.
It has also added to a shortage of affordable housing exacerbated by Iceland’s tourism boom.
Iceland is also struggling to accommodate a rising number of asylum seekers, creating tensions within the small, traditionally homogenous country.
The number of refugees seeking protection in Iceland jumped to more than 4,000 in each of the past three years, compared with a previous average of fewer than 1,000.