Iceland Economic Snapshot

Economic Forecast Summary (June 2022)

The economy is projected to grow by 4.2% in 2022 and 2.8% in 2023, driven by buoyant goods and services exports. Household consumption will slow in the course of 2023 as real wage growth is set to cool. Worsening financial conditions and uncertainty related to the consequences of the war in Ukraine is expected to weigh on business investment, but investment in residential housing will remain solid. Unemployment will continue to decline slightly, to around 4.5% at the end of 2023.

Economic Survey of Iceland - 7 July 2021

Executive Summary


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Reform Priorities (April 2021)

Going for Growth 2021 - Iceland

The pandemic-related collapse of foreign tourism and international travel, which account for almost a fifth of GDP, highlighted the need to diversify the economy. Iceland needs to improve resilience and find new drivers of productivity and employment growth, in particular given the objective of emission reductions. Boosting skills across the population is hence the top priority, along with reforms to strengthen competitive forces.

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2021 Structural Reform Priorities

  • Education and skills: Foster strong and relevant skills
  • Environmental policy: Move towards a low-carbon economy
  • Agriculture: Reduce agricultural support
  • Competition and regulation: Remove barriers to domestic and foreign entry
  • Tax system: Lower the marginal tax wedge


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