Iceland: Fifth Review Under the Stand-By Arrangement, and Request for Modification of Performance Criteria and Rephasing of Access—Staff Report; Informational Annex; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Iceland

IMF Staff Country Reports, June 6, 2011

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Canonical URL: Iceland: Fifth Review Under the Stand-By Arrangement, and Request for Modification of Performance Criteria and Rephasing of Access—Staff Report; Informational Annex; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Iceland

The paper describes the impressive economic progress made by Iceland in implementing program policies under a program supported by a Stand-By Arrangement (SBA).
Progress highlighted:
- Stabilizing the exchange rate.
- Bringing inflation down.
Authorities identified key remaining challenges:
- Reduce the high level of unemployment.
- Lift capital controls.
- Accelerate private sector debt restructuring.
- Strengthen financial sector supervision and regulation.
The report concludes: full implementation of the economic program will create favorable conditions for economic progress based on sustainable public finances, private enterprise, and free markets.

Continue implementing SBA-supported program policies to sustain exchange rate stability and lower inflation.
Prioritize measures to reduce unemployment.
Implement a strategy and timetable to lift capital controls.
Accelerate private sector debt restructuring efforts.
Strengthen financial sector supervision and regulation to mitigate systemic risks.