The Crisis Is Over, Says Economist - The Reykjavik Grapevine

The Crisis Is Over, Says Economist

Published June 28, 2012

A professor of economics contends that Iceland has officially made its way out of the economic crisis, even if the standard of living is not as good as it was in 2007.
Support for the current government remains abysmally low, with many pundits citing the state of the Icelandic economy as the main reason for the unpopularity.
However, unemployment has fallen beneath the EU average, and Iceland’s gross GDP has grown at a rate exceeding many European countries.
This, and other data points, have not gone unnoticed by professor of economics Gylfi Zoega, RÚV reports. He has gone so far as to say that Iceland’s economic crisis is by all accounts over.
He points out that there has been an increase in investment, private consumption and exports, and that both fishing and tourism have been further emerging industries. He also contends that purchasing power has reached 2005 levels, and the GDP is comparable to where it was in 2006.
“Everywhere we see signs that this society is doing very well for itself,” he told reporters. “Yes, the crisis has been over for some time. But the quality of life isn’t as good as it was in 2007, because we’re still living on loans. That is to say, it’s easy to maintain a certain lifestyle in the short term by taking out large loans from abroad. But now, the quality of life we have comes from within the country, and we are on the way to paying off our foreign loans.”
In fact, just last week Iceland made its second early payment on the loan it received from the International Monetary Fund after the 2008 collapse, with Reuters noting that the country’s annual growth for the first quarter of the year is at 4.5% – the highest it has been since the first quarter of 2008.

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