Iceland Economic Outlook
March 26, 2019The economy recovered in Q4 2018 following Q3’s sharp deceleration, although growth nevertheless remained weaker than in H1. A rebound in residential investment largely drove the print, the only silver lining in an otherwise gloomy quarter. Private consumption faded noticeably, as did public spending, while business investment sharply contracted for a second consecutive quarter. The external sector also deteriorated, as imports and exports both fell steeply—with service exports plunging due to softer tourism activity. Looking ahead, large scale union strikes have been scheduled in coming weeks after wage negotiations broke down, which could negatively impact growth in the second quarter.
Iceland Economic GrowthSoftening private consumption and tourism activity will likely dent economic growth ahead, and could also hit residential investment. In addition, the country is vulnerable to a growth slowdown in Europe, as well as from a shortage of skilled workers owing to the tight labor market. Nevertheless, growth should remain solid relative to peers. Our panelists expect GDP to rise 2.7% in 2019, which is unchanged from last month’s forecast, and 2.6% in 2020.
Iceland Economy Data
5 years of Iceland economic forecasts for more than 30 economic indicators.
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|Bond Yield||4.39||-0.99 %||Apr 12|
|Exchange Rate||119.7||-0.52 %||Apr 12|
|Stock Market||1,373||-0.32 %||Apr 12|
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