News
Iceland’s Economic Growth Not As Great As It Seems

Iceland’s Economic Growth Not As Great As It Seems

Published February 22, 2013

The capital controls that have helped to stabilize the króna in the wake of the 2008 collapse and assist Iceland’s economy in achieving some growth are both a blessing and a curse.
Reuters reports that the same controls that have helped Iceland to sustain a 2% growth – greater than that being experienced throughout continental Europe – are weighing down the country’s big ticket companies, like gaming powerhouse and Eve Online creators CCP, which operate on a global scale and need to freely conduct business with investors operating in foreign currencies.
“The economic remedy has now become part of the problem,” said CCP CEO Hilmar Pétursson. “We are not building the company as fast as we could from a global perspective.”
The capital controls make it very difficult for the company to purchase the foreign currency it needs and to conduct business with equity investors abroad.
While 2% growth is admirable compared to Iceland’s European peers, it is still well below the 4.5% the International Monetary Fund (IMF) had predicted for the country in 2011 through 2013, due, in part, to inflation being stubbornly high and for ongoing intervention from the Central Bank to keep the currency afloat.
Reuters notes that the parliamentary elections scheduled for April are only adding to the uncertainty in the country, as voters are growing weary of austerity. “Polls show centre-right parties [Independence Party and Progressive Party] widely seen as responsible for the crisis may replace a leftist government.”



News
News In Brief: Eurovision, Capital Controls and the Sigmundur Davíð-Donald Collusion

News In Brief: Eurovision, Capital Controls and the Sigmundur Davíð-Donald Collusion

by

The top story of the past two weeks is without a doubt the lifting of the last of the capital

News
Petition Going To Protest Deportation

Petition Going To Protest Deportation

by

A petition is going protesting the impending deportation of asylum seeker Sid Ahmed Haddouche and his family. Sid is a

News
Bird Flu Breakout In Iceland Likely

Bird Flu Breakout In Iceland Likely

by

Preparations against a possible bird flu outbreak have been ramped up, reports RÚV. The Icelandic Food and Veterinary Authority (IFVA) has

News
Investigation Opened Into Chatty Bus Driver

Investigation Opened Into Chatty Bus Driver

by

An investigation has been opened into an incident in which a bus driver allegedly spoke on his mobile phone without

News
UPDATE: Man Just Couldn’t Wait To Shoot His Gun

UPDATE: Man Just Couldn’t Wait To Shoot His Gun

by

Police have arrested the man who shot off a gun in Kópavogur earlier this week, reports RÚV. Police confirm that the

News
Local Mink Shot Dead In The Streets

Local Mink Shot Dead In The Streets

by

The scuttling mink spotted in Reykjavík city centre yesterday morning has been shot by an animal control officer, reports Vísir.

Show Me More!