According to the latest projections of Statistics Iceland (SI) the economy of Iceland will grow by 4.8% in 2016, thanks to strong private consumption and investment. GDP and private consumption growth was also in excess of 4% in 2015
Growth is expected to remain strong in 2017, or 4.4%, but slow down to 3% in 2018 and then to 2.6 to 2.9% per annum for 2019 to 2022.
At the end of this year SI expects private consumption to have grown by 7.1% and investment by 21.7%. In 2017 SI’s expects private consumption to grow by 5.7% and investment by 7.4%. For the remaining years of the forecast (2018 to 2022) investment is expected to increase 1.4 to 4.2% yearly.
SI reports that consumption, investment and tourism growth is now thought to be greater than previously forecast. A current account surplus is expected for the entire period, but net export contributions to growth will negative during 2016 and 2017.
Employment growth shows no signs of diminishing but its pace is expected to slow after 2017 according to SI. Wages and purchasing power have increased greatly in recent years and wage uncertainty is considered to be low for the next two years.
Read more: The unemployment rate keeps going down — labour shortage looming
According to SI Icelandic króna strong exchange rate appreciation in recent months of this year delays the expected pick-up of inflation. Inflation is predicted to increase in 2017, peak in 2018 and subsequently decrease gradually.
The last economic forecast was published on 27 May 2016 May. The next forecast is scheduled for spring 2017.
According to the latest projections of Statistics Iceland (SI) the economy of Iceland will grow by 4.8% in 2016, thanks to strong private consumption and investment. GDP and private consumption growth was also in excess of 4% in 2015
Growth is expected to remain strong in 2017, or 4.4%, but slow down to 3% in 2018 and then to 2.6 to 2.9% per annum for 2019 to 2022.
At the end of this year SI expects private consumption to have grown by 7.1% and investment by 21.7%. In 2017 SI’s expects private consumption to grow by 5.7% and investment by 7.4%. For the remaining years of the forecast (2018 to 2022) investment is expected to increase 1.4 to 4.2% yearly.
SI reports that consumption, investment and tourism growth is now thought to be greater than previously forecast. A current account surplus is expected for the entire period, but net export contributions to growth will negative during 2016 and 2017.
Employment growth shows no signs of diminishing but its pace is expected to slow after 2017 according to SI. Wages and purchasing power have increased greatly in recent years and wage uncertainty is considered to be low for the next two years.
Read more: The unemployment rate keeps going down — labour shortage looming
According to SI Icelandic króna strong exchange rate appreciation in recent months of this year delays the expected pick-up of inflation. Inflation is predicted to increase in 2017, peak in 2018 and subsequently decrease gradually.
The last economic forecast was published on 27 May 2016 May. The next forecast is scheduled for spring 2017.
