Iceland Economic Outlook
May 31, 2022GDP likely grew at a robust pace in Q1 2022. Private spending should have increased thanks to the complete removal of Covid-19 restrictions in February, coupled with unemployment falling to its pre-pandemic level. Moreover, the recovery of the tourism sector continued, with total hotel stays and foreigner growing hugely year on year in the quarter. Turning to Q2, momentum is likely weakening. In April, the spike in global commodity prices pushed up producer prices to an over decade high, hitting the industrial and external sectors. The tourism industry is also now feeling the impact of the Ukraine war: Annual growth of total hotel stays and foreigner stays softened in April. Meanwhile, red-hot inflation threatens to offset the boost to activity from the fall in unemployment registered in April by dampening household spending in Q2.
Iceland Economic GrowthGrowth will be stable this year, virtually unchanged from 2021’s level. Stronger export growth—especially in the fishing and aluminum sectors—will drive the expansion. Public and private spending and a recovery in tourism will also support activity. Still, renewed pandemic restrictions amid new Covid-19 strains and slowdown among major trading partners cloud the outlook. FocusEconomics panelists see the economy growing 4.2% in 2022, which is down 0.1 percentage points from last month’s forecast, and 3.2% in 2023.
Iceland Economy Data
5 years of Iceland economic forecasts for more than 30 economic indicators.
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|Bond Yield||3.45||-0.99 %||Dec 31|
|Exchange Rate||121.1||-0.52 %||Jan 01|
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