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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18 June 2024
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10 June 2024
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13 May 2024
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6 May 2024
A majority of the market now consider the monetary policy stance too tight. This opinion has become much more pervasive than in April, in response to steadily growing restraint alongside receding inflation and unchanged interest rates.
29 April 2024
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29 April 2024
Landsbankinn Economic Research forecasts limited economic growth this year. Inflation remains persistent and rate cuts aren’t expected until this fall.