We forecast 6.5% economic growth in Iceland this year, the greatest since 2007. Robust growth in export sectors coupled with strong domestic demand has driven handsome GDP growth in the past year.

Both the number of visitors to Iceland via Keflavík Airport andunemployment numbers are back to pre-pandemic levels.

The inflation rate, measuring 9.7% in August, decreased YoY between months.

The Central Bank of Iceland (CBI) raised interest rates by 0.75 percentage points. The policy rate is now 5.5% and has not been higher in six years.

Market agents expect inflation to peak in Q3 2022 at an average rate of 10%, according to a survey of market agents’ expectations conducted by the Central Bank of Iceland (CBI) in August.

Around 234,000 foreign passengers departed Iceland via Keflavík International Airport in July, departures in July increased about 1.3% compared to July 2019.

After sharp declines in the stock markets recently, the price of shares rose in 19 of the 22 companies listed on the Icelandic stock exchange in July.

Purchasing power in June was 2.9% lower than it was in January 2022, when it had never been higher.

The biggest driver of the rise in the CPI between months in July are airfares, which rose by 19.9%.

Around 176,000 foreign passengers departed Iceland via Keflavík Airport in June. Departures in June were about 90% of what they were in June 2019, prior to the pandemic.

The Icelandic stock market dropped by 2.1% in June, compared to a 9.9% decrease in May.

The inflation rate, measuring 8.8% in June, has doubled in a year to reach its highest level since October 2009, when it was 9.7%.

The MPC raised the policy rate by 1 percentage point last week. The CBI’s key interest rate (seven-day term deposits) is now 4.75%, the highest in 5 years.

Total turnover of domestic payment cards increased by 16,5% YoY in May, at constant prices.

Around 112,000 foreign passengers departed Iceland via Keflavík Airport in May.

Gross domestic product (GDP) increased by 8.6% in the first quarter of 2022 compared with the same period last year.

Since January 2020, rental prices have risen by only 6.5% while the purchase price of apartments has risen by 38.1% over the same period, according to data from Registers Iceland.

Landsbankinn Economic Research published its macroeconomic and inflation forecast for 2022-2024, titled “Growth in the Shadow of Inflation”.

A great many things have changed since Landsbankinn Economic Research published its last macroeconomic and inflation forecast in October last year. The Covid-19 pandemic, with all its restrictions on consumption and daily life, has subsided and people are again free to travel. Icelandic consumption patterns in the past few months have shown clear signs of increased overseas travel and the stream of travellers to Iceland is also increasing. In general, the outlook can be described as bright. We forecast 5.1% economic growth this year, upping our forecast somewhat from last year, and expect growth to be driven by an increase in tourist numbers, a total of 1.5 million this year. Travellers to Iceland numbered 690,000 in 2021.

Registered unemployment was 4.5% in April, compared to 4.9% in March.

The MPC raised the policy rate by 1 percentage point last week. The CBI’s key interest rate (seven-day term deposits) is now 3.75%.

The CPI rose by 1.25% month-on-month in April, bringing the inflation rate to 7.2% compared to 6.7% in March.

The housing price index for the capital region increased by 3.1% MoM in March.

Departures of foreign passengers via Keflavík Airport were 101,000 in March.

The government released its fiscal plan for 2022-2027 last week.

The Icelandic króna remained broadly unchanged against the euro in March but weakened against the US dollar. The Central Bank intervened four times in the foreign exchange market, buying euros twice and selling euros twice

The CPI based on prices in March increased by 0.94% between months, bringing the headline number to 6.7%, up from 6.2% in February. Inflation has not been higher in Iceland since May 2010.

Icelandic State Financial Investments sold a 22.5% share in Íslandsbanki last week.

The CBI published a statement from the Financial Stability Committee and the Bank’s Financial Stability report last week.