Country snapshots 2017-18: Iceland

Strong growth

Economic growth is strong with continued expansion in tourism, robust private consumption and favourable terms of trade. Steep wage gains, employment expansion and large investments are fuelling domestic demand. The capital controls introduced during the financial crisis are being lifted. 

Currency appreciation and low import prices have kept inflation low. Inflationary pressures from wage increases and uncertainty with respect to the lifting of capital controls nevertheless call for a tight monetary stance. Moreover, the central bank should continue using its macro-prudential toolkit to tackle potentially large short-term capital inflows that might follow the lifting of capital controls. Reformed wage bargaining could prevent a future wage-price spiral while improved competition and reduced barriers to entry would boost productivity.

GDP growth

2013

Current prices ISK billion

2016

  

2017

% real change

2018

  

1 891.2 4.7 4.1 2.5

Visit www.oecd.org/eco/economicoutlook.htm         

©OECD Observer No 308 Q4 2016        




Economic data

GDP growth: +0.2% Q4 2019
Consumer price inflation: 2.3% January 2020
Trade (G20): -0.1% exp, -1.3% imp, Q4 2019
Unemployment: 5.1% January 2020
Last update: 11 March 2020

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