The rapid recovery of the Icelandic economy from the 2008 financial crash will continue until at least 2023, the latest economic forecast from Statistics Iceland shows. The dramatic 7.4% growth of last year is expected to slow down to 4.9% this year, 3.1% in 2018 before stabilizing around 2.6% on average during the years 2019-2023.
Growth will continue until 2023
The growth began in earnest in 2013, after a deep recession followed by uneven recovery in the years following the 2008 financial meltdown. The boom in tourism has played a key role in jump starting the economy.
Statistics Iceland expects private consumption to increase by 7.8% this year, and 5.3% in 2018, 3.6% in 2019 and between 2.6–3.1% annually during 2020–2023. Investment is also expected to be a major engine of growth this year, increasing by 8.8% in 2017. Investment is then expected to grow at a rate closer to GDP in 2018-23. Public consumption is expected to increase slower than economic growth throughout the period, increasing by only 2.2% in 2017, 1.3% yearly 2018–2019 but around 1.8% per year during 2020–2023.
Read more: Tourism generated 8.4-10% of Icelandic GDP in 2016
The major driver of Iceland’s current economic boom is tourism. As a result private consumption, disposable income, employment and real exchange rate have recovered to more or less the levels of the pre-financial crisis boom times and investment has grown to its historically average level. Contrary to previous economic booms there is a large current account surplus rather than a large deficit.
The rapid recovery of the Icelandic economy from the 2008 financial crash will continue until at least 2023, the latest economic forecast from Statistics Iceland shows. The dramatic 7.4% growth of last year is expected to slow down to 4.9% this year, 3.1% in 2018 before stabilizing around 2.6% on average during the years 2019-2023.
Growth will continue until 2023
The growth began in earnest in 2013, after a deep recession followed by uneven recovery in the years following the 2008 financial meltdown. The boom in tourism has played a key role in jump starting the economy.
Statistics Iceland expects private consumption to increase by 7.8% this year, and 5.3% in 2018, 3.6% in 2019 and between 2.6–3.1% annually during 2020–2023. Investment is also expected to be a major engine of growth this year, increasing by 8.8% in 2017. Investment is then expected to grow at a rate closer to GDP in 2018-23. Public consumption is expected to increase slower than economic growth throughout the period, increasing by only 2.2% in 2017, 1.3% yearly 2018–2019 but around 1.8% per year during 2020–2023.
Read more: Tourism generated 8.4-10% of Icelandic GDP in 2016
The major driver of Iceland’s current economic boom is tourism. As a result private consumption, disposable income, employment and real exchange rate have recovered to more or less the levels of the pre-financial crisis boom times and investment has grown to its historically average level. Contrary to previous economic booms there is a large current account surplus rather than a large deficit.
