Economic affairs
Economic forecast 2024-2027: The Economy Catches its Breath
Landsbankinn Economic Research forecasts a status quo in the economy between years and a 0.1% contraction in GDP. Setbacks affecte...
3 Dec. 2024
Monthly newsletter where Economic Research analysis new statistics, reviews current economic affairs and provides an outlook.
6 Nov. 2024
Monthly newsletter where Economic Research analysis new statistics, reviews current economic affairs and provides an outlook.
21 Oct. 2024
Last week, we published an economic forecast to the year 2027. The housing price and rental price indexes decreased more between months in September and household payment card turnover contracted between years domestically while rising abroad. The Central Bank of Iceland (CBI) published the minutes of the Monetary Policy Committee (MPC) meeting, which shows that all Committee members agreed to lower the policy rate. Several companies publish financial results this week.
14 Oct. 2024
Tomorrow morning, Landsbankinn Economic Research presents a new economic forecast to the year 2027 at a morning meeting in Harpa. This week, the Housing and Construction Authority (HMS) publishes the housing price index, the rental price index and its monthly housing market report. On Wednesday, the Central Bank of Iceland (CBI) releases the minutes of the Monetary Policy Committee’s last meeting. Last week’s highlight was that traveller numbers to Iceland are slightly up between years in September and there is a small uptick in unemployment.
7 Oct. 2024
The Monetary Policy Committee (MPC) of the Central Bank of Iceland (CBI) lowered the policy rate last week, for the first time in four years. The CBI’s key interest rate is now 9% after having stood unchanged at 9.25% for over a year. Inflation in the eurozone remains on a downward trajectory, measuring 1.8% in September, below the 2% inflation target. Inflation figures for the US will be published this week.
30 Sept. 2024
Inflation was slightly lower than expected in September, down from 6.0% to 5.4%. We nevertheless expect that the Monetary Policy Committee (MPC) will wish to proceed with caution when it meets early this week and that it will keep the policy rate unchanged on Wednesday.
23 Sept. 2024
This week, the Central Bank of Iceland (CBI) releases a statement from the Financial Stability Committee and a report on financial stability. Statistics Iceland publishes inflation figures for September on Friday. Last week, the Housing and Construction Authority (HMS) published the housing price index, which rose sharply between months, and the rental price index, which was down between months. Data on payment card turnover, published by the CBI last week, indicates that there is still considerable domestic demand for goods and services.
16 Sept. 2024
This week will see the publication of the housing price index, the rental price index and payment card turnover figures for August. Last week we learned that tourist arrivals in August of this year were similar to the same month in 2023. Unemployment increased slightly between months in August. The fiscal budget for 2025 was presented.
9 Sept. 2024
This week’s highlights are the publication of August tourist figures and registered unemployment, both set for release tomorrow. Last week, the minutes of the last rate decision meeting of the Monetary Policy Committee (MPC) were published. The MPC was unanimous in its decision to keep the policy rate unchanged, unlike the previous three meetings, at which one Committee member voted to lower rates by 0.25 percentage points.
2 Sept. 2024
Inflation decreased unexpectedly between months in August. The economy contracted slightly between months in the second quarter. At the same time, it has become clear that GDP growth was higher in 2023 than previously thought, and that the contraction was less pronounced in the first quarter. This week, the Central Bank of Iceland (CBI) publishes the balance of payment and the minutes of the last meeting of the Monetary Policy Committee (MPC).
26 August 2024
Non-domestic payment card turnover in Iceland is higher this year to date than previously thought, according to updated figures published by the Central Bank of Iceland (CBI) last week. This week’s highpoint is the CBI’s interest rate decision on Wednesday.
19 August 2024
Non-domestic payment card turnover in Iceland is higher this year to date than previously thought, according to updated figures published by the Central Bank of Iceland (CBI) last week. This week’s highpoint is the CBI’s interest rate decision on Wednesday.
12 August 2024
Departure by non-domestic travellers from Leifsstöð International Airport in July were very similar to the previous year while departures by domestic tourists are somewhat fewer. August measurements for the consumer price index take place this week and several listed companies publish results.
6 August 2024
Overnight stays by non-Icelandic travellers across all registered accommodation types contracted by 1.4% between years in June. This contraction is lower than that measured in non-domestic tourist numbers and payment card turnover
15 July 2024
The volume of travellers to Iceland decreased by 9% in June this year compared to June 2023. Unemployment was 3.1% in June, slightly higher than the same time last year.
8 July 2024
High interest rates have encouraged savings and detracted from demand in the economy. Household deposits had grown by 20% in May this year from the same month in 2023, according to the Central Bank of Iceland’s (CBI) newly published Hagvísar. Demand deposits have increased most.
1 July 2024
The consumer price index (CPI) rose by 0.48% in June. As a result, inflation measured 5.8%, down from 6.2%. Turnover based on March-April VAT reports contracted by 4.6% in real terms and the wage index rose by 0.2% in May, according to figures released by Statistics Iceland last week.
24 June 2024
The housing price index was up by 1.4% in May and the rental price index by 3.2%, according to figures published last week. While the Bank of England maintained an unchanged policy rate, the Swiss National Bank lowered its rate by 0.25 percentage points. Of most interest domestically this week is without doubt the CPI, to be published by Statistics Iceland on Thursday.
18 June 2024
Last week, we saw the publication of unemployment figures, tourist numbers and domestic payment card turnover in May. The US Federal Reserve kept its policy rate unchanged. Later today, the Housing and Construction Authority (HMS) releases the housing price index.
10 June 2024
The European Central Bank (ECB) lowered its policy rate last week. Stronger labour market figures from the US than generally expected increase the likelihood that the Federal Reserve will postpone initiation of rate cuts.
3 June 2024
Domestic product contracted by 4% in the first quarter of the year and inflation measured 6.2% in May, slightly higher than predicted.
13 May 2024
Household deposits have grown considerably alongside rising interest rates. This has resulted in greatly increased interest income for households, in fact in excess of interest expenses.
6 May 2024
A majority of the market now consider the monetary policy stance too tight. This opinion has become much more pervasive than in April, in response to steadily growing restraint alongside receding inflation and unchanged interest rates.
29 April 2024
Economic growth will be limited in coming years according to our newly published macroeconomic forecast up to and including 2026. We forecast 0.9% growth this year, 2.2% next year and 2.6% in 2026. We expect inflation to recede down to 5.5% by the fourth quarter of this year. A rate-cutting cycle will begin in October, so our forecast, and we expect the economy to pick up speed alongside falling interest rates.
29 April 2024
Landsbankinn Economic Research forecasts limited economic growth this year. Inflation remains persistent and rate cuts aren’t expected until this fall.
22 April 2024
Nominal housing prices have risen by 5.2% in the past 12 months, according to a new housing price index, and the real price of residential housing is slightly higher than the same time last year.
15 April 2024
Inflation will recede somewhat in April, from 6.8% to 6.1%, only to remain fairly stable in the coming months and stand at 5.9% in July, according to our newest inflation forecast. Despite the dent interest rate increases have made in demand, the economy is still going fairly strong and there is tension in the labour market. Inflation expectations remain well above target.
8 April 2024
Around 14% more tourists travelled through Keflavík International Airport in February of this year than the same month of 2023. The duration of stays is shorter than before, with registered overnight stays declining by 2.7% between years in February.
18 March 2024
Figures for 2023 indicate that international tourists had fewer overnight stays in Iceland on average as compared to 2022 yet spent more per day than previously.