An upgrade by Fitch Ratings has made the country officially “investment grade”, for locals and foreigners alike.
Iceland has had its share of struggles since the bank collapse of 2008, but unemployment has gradually declined while the crown has strengthened modestly. The slow-and-steady approach to recovery has attracted the attention of market analysts Fitch Ratings, who last Friday upgraded the country from BBB- to BB+. This rating makes the country investment grade again.
During a period when Fitch downgraded five eurozone countries in the past month or so alone, Fitch said their outlook on Iceland “reflects the progress that has been made in restoring macroeconomic stability, pushing ahead with structural reform and rebuilding sovereign creditworthiness.”
Iceland left the International Monetary Fund (IMF) bailout programme last year, helping to boost confidence. Relatedly, the IMF forecasts growth of 2.5% for 2012 for Iceland, surpassing many of its European neighbours.
Minister of Finance Steingrímur J. Sigfússon told the BBC that the small size of the country has been a key to its recovery, saying, “You are quicker turning a small boat around than a big ship.”