From Iceland — Biggest Economic Contraction In The History Of The Independence

Biggest Economic Contraction In The History Of The Independence

Published June 26, 2020

Valur Grettisson
Photo by
Art Bicnick

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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