Weekly bulletin 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.