A new issue of Statistical Series, presenting the economic forecast for 2015–2019, is now available. GDP growth is forecast at 4,3% in 2015 and 3,5% in 2016, mostly due to growth in private consumption and investment. GDP growth is expected to be 2.5–2.8% in the following years.
Investment and private consumption drive economic growth during the first two years of the forecast period. In 2015 private consumption is expected to grow by 4.4% and investment by 17.7%. During 2016 private consumption is predicted to grow by 4.7% and investment by 15.5%.
During 2017–2019, private consumption growth is estimated to increase by 2.7–4.2% and investment by 0.3–5.2%.
Public consumption will increase by 1.1–1.5% per annum and public investment growth will remain subdued.
Low oil and other commodity prices, low trading partner inflation and appreciation of the Icelandic krona held domestic inflation in check despite labour cost increases. Inflation which stands at 1.7% is expected to increase to 3.2% in 2016 and reach 3.7% in 2017 but decline in 2018–2019.
Substantial wage increases for 2015 and 2016 result from collective wage agreements reached during 2015. Revision clauses maintain wage uncertainty in the short term.
The last economic forecast was published on 29th of April 2015. The next forecast is scheduled for April 2016.
Economic forecast, winter 2015 — Statistical Series