3 June 2024
The week ahead
- On Tuesday, the Central Bank of Iceland (CBI) releases balance of payment and net national debt figures.
- On Wednesday, the CBI releases a statement from the Financial Stability Committee.
- The European Central Bank (ECB) announces its interest rate decision on Thursday.
- On Friday, unemployment figures will be published for the US.
Image of the week
According to preliminary figures from Statistics Iceland, the domestic economy contracted by 4% between years in the first quarter. By comparison, there was 8.3% growth in the first quarter of 2023. Since then, economic growth has diminished with every passing quarter and finally, GDP contracted for the first time since the first quarter of 2021.
Highlights of the previous week
- The CPI rose by 0.58% between months in May, bringing the 12-month change from 6.0% to 6.2%. This increase is slightly higher than we had predicted - we had expected inflation to remain unchanged at 6.0%. Overall, price increases occurred on a fairly broad basis in May, with many components of the index rising slightly between months. Despite a higher increase than expected in May, we continue to forecast around 6% inflation in the coming months.
- The economy contracted by 4% between years in the first quarter. This is the first time since 2021 that GDP contracts between years. The contraction is due mainly to less stockpiling as a result of the capelin catch failure. Private consumption and investment was up in the quarter; a sign of demand pressure.
- Registered overnight stays decreased by 13% between years in April. Overnight stays by international tourist decreased by 15% and by 4.7% for domestic travellers.
- In 2023, regular monthly wages were ISK 720,000 on average and total wages were ISK 935,000.
- Inflation in the eurozone rose from 2.4% to 2.6% in May.
- Skagi (investors' presentation) and Ísfélagið released financial statements. Landsbankinn and Kvika Bank signed an agreement providing for Landsbankinn’s purchase of TM. Icelandair retracted its previously released earnings estimate for the year as result of increased uncertainty.
- Kaldalón, Síminn and Útgerðarfélag Reykjavíkur issued bills; Arion Bank issued general bonds.
Statistics and market data
Disclaimer
This review and/or summary is marketing material intended for information purposes and not for business purposes. This marketing material does not contain investment advice or independent investment 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.Information about the prices of domestic shares, bonds and/or indices is source from Nasdaq Iceland - the Stock Exchange. Landsbankinn’s website contains further information under each individual equity, bond class or index. Information about the prices of non-domestic financial instruments, indices and/or funds are sourced from parties Landsbankinn considers reliable. Past returns are not an indication of future returns.Information about the past returns of Landsbréf funds is based on information from Landsbréf. Detailed information about the historic performance of individual funds is available on Landsbankinn’s website, including on returns for the past 5 years. Information about the past performance of funds show nominal returns, unless otherwise stated. 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.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, available 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 (https://www.cb.is/financial-supervision/)You may also be interested in
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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.