A new issue of Statistical Series, presenting a revised economic forecast for 2017-2023, has been published.

Gross domestic product (GDP) for Iceland is estimated to have increased by 3.8% in 2017, driven by strong growth in private consumption (7.7%) and investments (9.3%). The forecast for public consumption and investments is raised considerably due to updated government budget plans. Estimated export growth in 2017 is close to 3.5% and growth for imports of goods and services approximately 11%.

GDP growth is expected to be 2.9% in 2018 and 2.5-2.8% in the remaining years. The main drivers of growth will be domestic demand, mostly private consumption. Investment is expected to grow by 1.3% in 2018 and on average by 3.6% in the following years. For 2018, public investment is forecast to increase by 12% and residential investment by 19%, while showing a more moderate growth in the remaining years. Export volume is estimated to grow by 2.5-4.1%, imports in the range of 2.4-5.7% and current account surpluses are expected to continue.

Inflation was 1.8% on average in 2017 while rising housing prices predominated the effects of lower import prices. Inflation is expected to peak at 2.9% in 2019 but will edge towards the Central Bank’s 2.5% inflation target in the latter half of the forecast period.

The last economic forecast was published 3rd of November 2017. The next forecast is scheduled for May 2018.

Economic forecast, winter – revision — Statistical Series