Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

A total solar eclipse will be visible in western Iceland on 12 August this year. There is enormous demand for flights to the country, accommodation, restaurants and rental cars during that period, and many services are already fully booked. Higher turnover and price pressure on various services will likely be considerable in the areas where the eclipse will be visible.

Monthly newsletter of current economic affairs in Iceland.

The cooling trend in the domestic economy looks set to continue longer than previously predicted. Increasing unemployment and lower demand for workers indicates a slackening in the labour market. This situation is likely to continue for longer than otherwise due to high policy rates.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

The Icelandic economy will grow at a slow pace in coming years, according to a new economic forecast from Landsbankinn Economic Research. Gross domestic product (GDP) contracted by 1.0% last year, largely due to a negative contribution from foreign trade, but this year the outlook is for 1,5% growth in GDP. Strong private consumption and increased exports appear to have vitalised the economy this year; however, various forces are restraining growth and will continue to cool the system in the years ahead.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Monthly newsletter of current economic affairs in Iceland.

Landsbankinn Economic Research forecasts 1.4% economic growth this year and 2.1% next year. The economy has cooled down following a robust period of growth in the years after the pandemic and we now anticipate a slow start.  

Monthly statistics analysis and an overview of current economic affairs in Iceland.

Monthly statistics analysis and an overview of current economic affairs in Iceland.

Monthly statistics analysis and an overview of current economic affairs in Iceland.

Monthly statistics analysis and an overview of current economic affairs in Iceland.

Monthly statistics analysis and an overview of current economic affairs in Iceland.

Monthly statistics analysis and an overview of current economic affairs in Iceland.

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.

Landsbankinn Economic Research forecasts a status quo in the economy between years and a 0.1% contraction in GDP. Setbacks affected the export sector in the first half of the year, with capelin catch failure and slower growth in the travel sector causing a contraction. This has been compounded by the cooling impact of high interest rates on demand, which nevertheless remains strong.