26 February 2024
The week ahead
- On Tuesday, Nova klúbburinn and Sýn publish results.
- On Wednesday, Statistics Iceland is set to publish the February CPI. We expect the Index to increase by 0.89% between months and annualised inflation to decrease from 6.7% to 6.1%. Iceland Seafood and VÍS publish their results.
- On Thursday, Statistics Iceland publishes national accounts.
- On Wednesday, inflation figures will be published for the UK.
Image of the week
There was a continuous surplus on foreign trade in the years 2010 to 2019, driven by high growth in the travel sector. Iceland utilised this surplus prudently, with domestic parties making payments on foreign loans, pension funds purchasing overseas assets and the CBI building FX reserves. The surplus turned to a deficit in 2020 and 2021 during the pandemic when one of the country’s largest export sectors more or less shut down.Foreign trade has been more or less balanced since.
Highlights of the previous week
- The housing prices index rose by 0.4% between months in January. This brought the annual increase from 4.5% to 5.4%, continuing the trend that has been more or less on-going since the value was 0.8% in July of last year. The price of single-family dwellings (+8.4%) has increased more than multi-family dwellings (4.6%) in the past twelve months. In addition to the housing price index, the Housing and Construction Authority (HMS) released the rent index and its monthly report on the real estate market.
- According to the minutes of the interest rate decision meeting of the Monetary Policy Committee on 7 February, one committee member voted against the Governor’s motion to keep the policy rate unchanged, calling instead for a 0,25 percentage point rate cut.
- Statistics Iceland released foreign trade figures for the fourth quarter of 2023. There was an ISK 54 billion deficit in the fourth quarter. For the entire year, the deficit was rather lower, or ISK 17 billion.
- Statistics Iceland also published figures on turnover based on VAT reports for November and December 2023. Year-over-year growth was most notable in real estate trade, the travel sector and construction while turnover contracted in metal production and utilities.
- In the stock market, Síminn and Brim published results, the largest shareholders in Fly Play increased the company’s capital and a draft bill for the sale of Íslandsbanki was submitted for perusal.
- In the bond market, Government Debt Management and Útgerðarfélag Reykjavíkur auctioned bills and Government Debt Management decided to cancel the Treasury note auctions still scheduled in the first quarter.
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
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.
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.
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
Last year, wages increased by 10% on average between years. Despite much higher wages, their purchasing power, i.e. the goods and services that can be purchased for wages, only grew by 1%.
22 Jan. 2024
Total government expenditure on domestic research and development (R&D) was 2.7% of GDP in 2022. This is slightly higher than the EU average yet lower than in countries like Denmark, Finland, Sweden and Germany.