The statement could literally be translated as, “it will all work out in the end”. It is also implied that it will work out on its own, with little management from anyone. This Zen-like stance may not be the fuel to start a huge project, but it definitely assuages any disappointments, frustrations, or difficult situations one may find themselves in.
In Iceland, the statement is used for anything from getting a flat tire to playing paper chase in a bureaucratic manoeuvre, and even to something you tell your best friend when a relationship has failed: Þetta reddast.
It also has a similar sense as the idiom: “it is no use crying over spilled milk”. However, this statement is more about moving on towards some productive action to fix the problem rather than lamenting. Þetta reddast is more of an attitude that it is all out of our control anyways.
It can be most reflected in the weather that Icelanders love to constantly talk about as it greatly affects daily life, and has done so for centuries. In Iceland, they say, “if you don’t like the weather, wait five seconds”. The weather is so unpredictable and changing that it obviously influences the way things are done. When there is so much unpredictability, as well as constant change, there is no better stance than þetta reddast.