Iceland: Staff Report for First Review under Stand-By Arrangement and Requests for Extension of the Arrangement, Waivers of Nonobservance of Performance Criteria, and Rephasing of Access
IMF Staff Country Reports, October 20, 2009
Source details
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- Iceland: Staff Report for First Review under Stand-By Arrangement and Requests for Extension of the Arrangement, Waivers of Nonobservance of Performance Criteria, and Rephasing of Access
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Bibliographic details
- Authors: Arrangement, Requests
- Published: October 20, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451819410.002
Executive summary
- Paper discusses key findings of the First Review Under the Stand-By Arrangement for Iceland (IMF Staff Country Reports).
- Post-crisis dynamics observed:
- a sharp drop in GDP
- rapid decline in inflation
- shift of the current account to balance
- gradual stabilization of currency and financial markets
- Several quantitative and structural program targets were missed.
- Authorities and IMF staff agreed that preserving stability and sustainability requires:
- a faster pace of fiscal adjustment
- a more gradual pace of capital account liberalization
Major findings and diagnostics
- Macroeconomic dynamics:
- Sharp drop in GDP (no numerical GDP value provided in source text)
- Rapid decline in inflation (no numerical inflation rate provided in source text)
- Current account shifted to balance
- Currency and financial markets showed gradual stabilization
- Program implementation:
- Multiple quantitative and structural performance criteria were not met (specific criteria not enumerated in source text)
- Policy trade-offs emphasized:
- Fiscal consolidation speed vs. economic stabilization
- Pace of capital account liberalization vs. financial and external stability
Policy recommendations and agreed actions
- Fiscal policy:
- Implement a faster pace of fiscal adjustment to restore sustainability
- Capital account management:
- Adopt a more gradual pace of capital account liberalization to support stability
- Program management:
- Address missed quantitative and structural targets through strengthened implementation and monitoring (specific measures not detailed in source text)
Thematic subjects and keywords
- Subjects: Balance of payments, Banking, Capital controls, External debt, Financial institutions, Financial statements, Loans, Public debt, Public financial management (PFM)
- Keywords: Capital controls, CR, debt, debtor-creditor agreement, Financial statements, fiscal consolidation objective, Global, internal audit procedures practice, ISCR, Islandsbanki acquisition, Loans, management operation, private sector, support private sector demand
International Monetary Fund. Iceland: Staff Report for First Review under Stand-By Arrangement and Requests for Extension of the Arrangement, Waivers of Nonobservance of Performance Criteria, and Rephasing of Access. October 20, 2009.