Iceland: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iceland

June 22, 2016

Preview Citation

Format: Chicago

Iceland: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iceland, (USA: International Monetary Fund, 2016) accessed November 21, 2024

Summary

This paper provides an assessment of the economic conditions, outlook, and crises in Iceland. There is a mounting sense that capital controls hurt growth prospects, repressing local financial markets, scaring foreign investors, and impeding savings diversification, and that it is time for them to go. Recent settlements with the bank estates are a huge step forward, improving already favorable macroeconomic conditions. At 4 percent in 2015 and gaining pace, real GDP expansion is among the fastest growing in Europe, opening up a positive output gap. However, the biggest risk for Iceland is overheating. Large wage awards on top of already hot economic readings speak to Iceland’s boom-bust history.

Subject: Balance of payments, Bank deposits, Bank supervision, Banking, Capital account liberalization, Capital controls, External sector statistics, Financial regulation and supervision, Labor, Wages

Keywords: Asset price pressure, Bank supervision, Baseline projection, Capital account liberalization, Capital controls, CBI governor, CBI transactions, CR, Europe, Global, Iceland, IMF staff projection, Inflation expectation, ISCR, Right, Wages

Publication Details

Pages:

59
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2016/179
Stock No:

1ISLEA2016001
ISBN:

9781475563603
ISSN:

1934-7685

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