Statistics Iceland predicts that the gross domestic product (GDP) of Iceland will reduce by a staggering 8.4% this year, meaning that this is the most significant economic contraction in the history of independent Iceland, or since 1944.
The reason is relatively apparent: the Coronavirus have paralysed the economy, especially when it comes to the travel industry. Also, Statistics Iceland assumes private consumption will be reduced by 6.1%, exports by around 30%, and that unemployment will be steady at around 8.2% until next year.
But there is some good news. Statistics Iceland believes that the turnaround will be swift, and that the GDP will go up by 4.9% next year and that economic growth will be around d 2.5% to 2.9% over the next few years.
Also, they believe that private consumption will be up to 5.5% and that unemployment will go down to 6.8% next year. Exports are thought to go up by 19%.
National expenditure will likely be reduced by 4.4% this year, and 4.3% the year after.
In short, we’re officially in the middle of recession, kids.
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