The Icelandic economy continued to expand last year, growing by a robust 3.6% in real terms, the preliminary national accounts for 2017 show. By now Iceland has made a full recovery from the 2008 financial crash. Statistics Iceland reports that the Icelandic economy is now 15.3% larger than it was at the pre-crash peak.
Slower export growth
In recent years exports have been a major driver of economic growth, especially tourism. Last year imports grew much faster (by 11.9%) than exports, (which grew by 4.8%). Despite a large foreign trade surplus, a higher growth in imports compared with exports contributed to a decreased growth in GDP.
Private household consumption increased was a major contributor to economic growth, expanding by 7.8%. Investment, which has increased dramatically in recent years increased by 9.3%, compared with 22.5% in 2016. There was an increase of 4.3% in the business sector and a 21.6% increase in residential construction.
Government consumption at historical average
Investment growth in public works amounted to 23.4% which is a considerable growth compared with previous years. The share of investment was 22.1% of GDP in 2017 which is close to the historical average. The average share for the period 1980–2016 was 21.3%.
Government final consumption grew by 2.6%. In 2017 government consumption amounted to 23.3% of GDP, which is close to the long term (1997-2018) average of 23.4% of GDP.
The Icelandic economy continued to expand last year, growing by a robust 3.6% in real terms, the preliminary national accounts for 2017 show. By now Iceland has made a full recovery from the 2008 financial crash. Statistics Iceland reports that the Icelandic economy is now 15.3% larger than it was at the pre-crash peak.
Slower export growth
In recent years exports have been a major driver of economic growth, especially tourism. Last year imports grew much faster (by 11.9%) than exports, (which grew by 4.8%). Despite a large foreign trade surplus, a higher growth in imports compared with exports contributed to a decreased growth in GDP.
Private household consumption increased was a major contributor to economic growth, expanding by 7.8%. Investment, which has increased dramatically in recent years increased by 9.3%, compared with 22.5% in 2016. There was an increase of 4.3% in the business sector and a 21.6% increase in residential construction.
Government consumption at historical average
Investment growth in public works amounted to 23.4% which is a considerable growth compared with previous years. The share of investment was 22.1% of GDP in 2017 which is close to the historical average. The average share for the period 1980–2016 was 21.3%.
Government final consumption grew by 2.6%. In 2017 government consumption amounted to 23.3% of GDP, which is close to the long term (1997-2018) average of 23.4% of GDP.
