Iceland: 2019 Article IV Consultation-Press Release and Staff Report

December 19, 2019

Preview Citation

Format: Chicago

Iceland: 2019 Article IV Consultation-Press Release and Staff Report, (USA: International Monetary Fund, 2019) accessed November 23, 2024

Summary

This 2019 Article IV Consultation with Iceland discusses that after years of robust growth, economic activity has significantly weakened. Supply disruptions in tourism, the engine of recent growth, and the associated uncertainty have triggered a drop in domestic demand and an increase in unemployment. A swift policy response, with fiscal relaxation and monetary easing, has stabilized expectations and cushioned the effects. A moderate but fragile growth recovery is expected in 2020. Macroprudential measures are helping to preserve buffers for managing financial stability risks. Macroprudential policies are adequate, given still elevated household debt and real-estate prices and benign external financing conditions. Looking forward, the macroprudential toolkit could be expanded to contain potential risks in the loan portfolio over the medium term. Ongoing education reforms would boost human capital and productivity, greater transparency of large unlisted companies would preserve the business environment, and strategic policies in tourism and fisheries would protect the sustainability of traditional economic sectors.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, External debt, Fiscal policy, Government finance statistics, Income, National accounts, Public debt

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), CR, Global, Gross domestic product, IMF staff country, Income, Inflation expectation, ISCR, Policy, Policy accountability, Policy space

Publication Details

Pages:

65
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/375
Stock No:

1ISLEA2019001
ISBN:

9781513523651
ISSN:

1934-7685

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