4 March 2024
The week ahead
- On Tuesday, the Central Bank of Iceland (CBI) releases balance of payment and net national debt figures.
- On Thursday, Hampiðjan, Kaldalón and Síldarvinnslan publish financial statements. This is also an interest rate decision day at the European Central Bank (ECB).
- On Friday, the Directorate of Labour publishes registered unemployment in February. We will also see unemployment figures from the US.
Image of the week
Economic activity slowed down considerably as 2023 progressed following almost two years of robust growth in the post-pandemic era. This pattern extends to all aspects of the economy - overall growth, private consumption, capital formation, export and import. The year began with a bang only to slow down with each quarter.
Highlights of the previous week
- Economic growth was 4.1% in 2023, according to preliminary figures from Statistics Iceland. This was higher than expected, caused not least by changes to the institution’s updates to data for the first and third quarters. In the fourth quarter, both private consumption and capital formation contracted between years. Export was unchanged between quarters while import contracted by 6%. Economic growth measured 0.6% in the quarter, mainly due to the considerable reduction in import, which fits the contraction in private consumption and capital formation, with lower import leading to an increase in GDP.
- The CPI less housing rose by 1.33% between months, bringing the 12-month change up to 6.6% from 6.7%. Inflation was rather higher in February than expected, due mostly to January sales of garments and footwear ending sooner than usual, tariff increases for waste disposal, sewerage and cold water pressuring the CPI considerably more upward than expected, and the shopping basket price increasing more than anticipated. We still expect inflation to recede in the coming months but to only 5.5% by May instead of 4.9% as in our previous forecast.
- Statistics Iceland also published preliminary catch value figures for 2023, registered overnight stays in January and the travel sector’s share in GDP in 2023.
- Inflation in the Eurozone fell slightly between months in February, from 2.8% to 2.6%.
- Four companies published results last week: Iceland Seafood, Nóva klúbburinn, Sýn and VÍS (investors' presentation). Alvotech accepted an offer to sell shares, Arion Bank hosted investor days, Reginn entered into reconciliation discussions with the Competition Authority regarding the purchase of all share capital in Eik and PLAY registered subscriptions in the amount of ISK 4 billion.
- In the bond market, Iceland Seafood and Kaldalón auctioned bills and Landsbankinn auctioned subordinated bonds.
- Fitch confirmed Iceland’s sovereign rating of A with stable outlook.
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
7 May 2026
A total solar eclipse will be visible in western Iceland on 12 August this year. There is enormous demand for flights to the country, accommodation, restaurants and rental cars during that period, and many services are already fully booked. Higher turnover and price pressure on various services will likely be considerable in the areas where the eclipse will be visible.
17 April 2026
The cooling trend in the domestic economy looks set to continue longer than previously predicted. Increasing unemployment and lower demand for workers indicates a slackening in the labour market. This situation is likely to continue for longer than otherwise due to high policy rates.
3 Feb. 2026
Monthly newsletter of current economic affairs in Iceland.
6 Jan. 2026
Monthly newsletter of current economic affairs in Iceland.
2 Dec. 2025
Monthly newsletter of current economic affairs in Iceland.
4 Nov. 2025
Monthly newsletter of current economic affairs in Iceland.
22 Oct. 2025
The Icelandic economy will grow at a slow pace in coming years, according to a new economic forecast from Landsbankinn Economic Research. Gross domestic product (GDP) contracted by 1.0% last year, largely due to a negative contribution from foreign trade, but this year the outlook is for 1,5% growth in GDP. Strong private consumption and increased exports appear to have vitalised the economy this year; however, various forces are restraining growth and will continue to cool the system in the years ahead.