Weekly bulletin 15 January 2024
Just over 2.2 million tourists departed from Leifsstöð International Airport in 2023, in line with our October forecast. In that same forecast, we anticipate 2.3 million tourists in 2024. The year 2023 is the second largest tourist year from the beginning, only topped by 2018, when 2.3 million travellers visited Iceland. This past year only just exceeded 2017, which was previously the second largest tourist year.
15 January 2024
The week ahead
- On Tuesday, the Housing and Construction Authority (HMS) releases the housing price index for the capital area and the Central Bank (CBI) publishes payment card turnover.
- On Wednesday, inflation figures will be published for the UK.
Image of the week
Just over 2.2 million tourists departed from Leifsstöð in 2023, in line with our October forecast. The travel industry gained momentum as 2023 progressed to become the second largest tourist year in Iceland. The year that has just begun could well become the largest tourist year yet. We forecast an equal number of tourists as in the record year 2018, or 2.3 million.
Highlights of the previous week
- The Icelandic Tourist Board released data for December departures from Leifsstöð. In early 2023, tourist numbers were slightly under 2018 figures each month. As of June, figures were similar between these two years. In October and November, we saw higher numbers than in the same months of 2018 and in December, tourist numbers were similar to December 2018, despite volcanic and seismic activity on the Reykjanes peninsula. Figures from the Centre for Retail Studies, on foreign payment card turnover in Iceland, indicate that spending has not increased in line with increased tourist figures.
- We published an inflation forecast for January on Thursday last week, based on price measurements by Statistics Iceland that week. We are of the opinion that inflation will recede between months, from 7.7% to 7.2%. January is a balancing act between tariff increases and sales. We forecast receding inflation in coming months, or 6.8% in February, up to 6.9% in March and down again to 5.7% in April.
- Registered unemployment was 3.6% in December, up from 3.4% in November. Unemployment in December was 0.2 percentage points higher than in December the previous year. Unemployment fluctuates considerably between seasons, is highest in midwinter and lowest in summer. Changes should be considered between years rather than merely months.
- Inflation in the US measured 3.4% in December, up from 3.1%. The measurement came as somewhat of a surprise, with most analysts having forecast 3.2% inflation. Equity prices fell following the release of these figures.
- In the stock market, Hagar and Ölgerðin published results for the period 1 March to 30 November 2023. Icelandair and Play released December load figures.
- In the bond market, Landsbankinn and Íslandsbanki auctioned covered bonds. Government Debt Management auctioned Treasuries notes and published Markaðsupplýsingar. The City of Reykjavík published its issue forecast for 2024.
Statistics and market data
Disclaimer
This review and/or summary is marketing material intended for information purposes and does not constitute financial advice or an independent financial analysis. The legal provisions that apply to financial advice and financial analysis do not apply to this content, including the ban on transactions prior to publication. The review is based on publicly available information from parties that Landsbankinn deems reliable yet the Bank cannot independently guarantee the accuracy of the information. Landsbankinn is not liable for any loss that may result from use of the information contained herein.Information about the past performance of financial instruments or indices show nominal returns, unless otherwise mentioned. If results are based on foreign currencies, returns may increase or decrease as a result of currency fluctuations. Past returns are not necessarily an indication of future returns. Detailed information about the historic performance of financial instruments and indices is available on Landsbankinn’s website, including on returns for the past 5 years.Securities transactions involve risk and readers are encouraged to familiarise themselves with the Risk Description for Trading in Financial Instruments and Landsbankinn’s Conflict of Interest Policy on Landsbankinn’s website.Landsbankinn is licensed to operate as a commercial bank in accordance with Act No. 161/2002, on Financial Undertakings, and is subject to supervision by the Financial Supervisory Authority of the Central Bank of Iceland (www.fme.is).You may also be interested in
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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.
11 March 2024
The three large export sectors, tourism (ISK 600 bn), aluminium and aluminium products (ISK 320 bn) and seafood products (ISK 350 bn), were behind 70% of total export value in 2023. Other export created value in the amount of ISK 580 bn, more than either seafood products or aluminium and aluminium products.
4 March 2024
After almost two years of very robust economic growth in the post-pandemic era, the economy slowed down considerably as 2023 progressed.
26 Feb. 2024
There was a continuous surplus on foreign trade in the years 2010 to 2019. This turned to a deficit in 2020 and 2021 during the pandemic. Foreign trade has been more or less balanced since.
19 Feb. 2024
The composition of the labour market has changed somewhat since 1991. Managers, specialists, professionally qualified staff and service and retail sector employees have grown in number while office workers, farmers and fishermen have grown fewer.
5 Feb. 2024
Inflation has decreased in recent months and, in addition, fewer components have increased by over 10% in the past 12 months.
29 Jan. 2024
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