According to the quarterly national accounts, which were released today by Statistics Iceland, the GDP of Iceland grew by 4.2% in real terms during the first quarter of 2016. The year over year increase is nearly double the EU or the US, where GDP grew around 2% during the first quarter of 2016. The Icelandic economy has grown rapidly in the past several years. GDP growth was 1.2% in 2012, 4.4% in 2013, 2,0% in 2014 and 4.0% in 2015. Growth is expected to remain strong for the next five years.
Read more: The current state of Iceland’s economy: GDP expected to grow by 4.3% this year
According to Statistics Iceland growth in domestic expenditure, which grew by 8.3% was a key driver of growth. Private consumption grew by 7.1% while capital formation increased by 24.5%. Growing investment was primarily due to a 32.4% increase in business sector investment, as residential construction increased by 9.9% and government investment decreased by 1.5%. Government consumption showed a negligible change, growing by just 0.1%.
Iceland ran a heavy deficit in the balance of trade for goods in the first quarter of 2016. Exports increased by 6.4%, when compared to the first quarter of 2015, while imports increased by 15.2%. Most of the increase in exports came from the increase in the exports of services, primarily thanks to tourism. Exports of services increased by 13.3% while the export of goods only increased by 0.9%. Imports of goods increased by 17% in the same period. Thanks to the strong growth in the export of services Iceland had a positive trade balance in the first quarter, although it is only one tenth of what it was during first quarter of 2015.
According to the quarterly national accounts, which were released today by Statistics Iceland, the GDP of Iceland grew by 4.2% in real terms during the first quarter of 2016. The year over year increase is nearly double the EU or the US, where GDP grew around 2% during the first quarter of 2016. The Icelandic economy has grown rapidly in the past several years. GDP growth was 1.2% in 2012, 4.4% in 2013, 2,0% in 2014 and 4.0% in 2015. Growth is expected to remain strong for the next five years.
Read more: The current state of Iceland’s economy: GDP expected to grow by 4.3% this year
According to Statistics Iceland growth in domestic expenditure, which grew by 8.3% was a key driver of growth. Private consumption grew by 7.1% while capital formation increased by 24.5%. Growing investment was primarily due to a 32.4% increase in business sector investment, as residential construction increased by 9.9% and government investment decreased by 1.5%. Government consumption showed a negligible change, growing by just 0.1%.
Iceland ran a heavy deficit in the balance of trade for goods in the first quarter of 2016. Exports increased by 6.4%, when compared to the first quarter of 2015, while imports increased by 15.2%. Most of the increase in exports came from the increase in the exports of services, primarily thanks to tourism. Exports of services increased by 13.3% while the export of goods only increased by 0.9%. Imports of goods increased by 17% in the same period. Thanks to the strong growth in the export of services Iceland had a positive trade balance in the first quarter, although it is only one tenth of what it was during first quarter of 2015.
