A new issue of Statistical Series, presenting the economic forecast for 2015-2019, is now available. Iceland's economy is predicted to grow by 3.8% in 2015 and 3.2% in 2016 followed by yearly growth of 2.5-2.8%.
Iceland's GDP is expected to grow by 3.8% in 2015, due to 3.8% growth in private consumption and 18.1% growth in investment. In 2016 GDP is predicted to increase by 3.2% and investment by 16.3%. In the latter part of the forecest period, when investment growth will be lower, GDP is expected to grow by 2.5-2.8% and private consumption by roughly 3% per annum.
Public consumption is expected to increase by 1.5-1.8% yearly in 2015-2018 and slightly more in 2019.
Inflation which, because of the strengthening of the krona and the recent collapse in oil prices, is low by Icelandic standards and is expected to be 1.7% in 2015. Inflation is expected to rise to 3% in 2016 and then slowly decline towards the Central Bank's target inflation rate of 2.5%.
Wage negotiations for the majority of salaried employees are currently underway, but an agreement appears distant. A wide gap in exists between the bargaining parties, thus causing more uncertainty about wages and prices than usual.
The Government's most recent household debt relief program took effect in the beginning of 2015. It has considerable impact on household balance sheet and interest payments.
The last economic forecast was published the 14th of November 2014. The next forecast is scheduled for July 2015.
Economic forecast, spring 2015 - Statistical Series