A new issue of Statistical Series, presenting the economic forecast for 2013-2018, is now available. The Icelandic economy is predicted to grow by 2% this year and 2.5% in 2014. Private consumption is expected to grow by 1.6% this year while investment will contract by 3.1%. For 2014, private consumption is predicted to increase by 2.5% and investment by 10.6%. Excluding 2013, investment is growing during the forecast period, while remaining low in historical perspective. Public consumption will grow by 0.8% in 2013 but remain flat for 2014, with slow growth predicted for 2015 through 2018.
Robust private consumption growth and strengthening of the labour market during the first half of 2012 lost some steam during the second half of 2012. Stronger than expected, labour market growth in 2013 has bolstered disposable income but not increased private consumption. Inflation for 2013 is predicted to be 3.8%, slightly higher than in previous forecast. Wage negotiations currently underway increase the inflation uncertainty going forward.
The last economic forecast was published the 28th of June 2013. The next forecast is scheduled for early Aril 2014.
Economic forecast, winter 2013 - Statistical Series