The Icelandic economy has been severely affected by the pandemic. Sharp tourism contraction and containment measures caused real GDP to plummet by 6.6 percent in 2020. A modest recovery will take hold in 2021. Recovery prospects in the tourism sector depend on control of the epidemic and...

This 2017 Article IV Consultation highlights Iceland's continued real GDP growth, driven by tourism. Growth reached 7.2 percent in 2016 and is projected at almost 6 percent in 2017 before tapering to about 2.5 percent over the medium term. Bank credit to the nonfinancial private sector remains...

This paper analyzes the explosion of tourism in Iceland, which has surged above all expectations. The number of tourists has almost quadrupled since the Eyjafjallajokull eruptions in 2010, establishing tourism at the heart of the economy. Tourists do not seem to be driven mainly by rising...

This paper provides an assessment of the economic conditions, outlook, and crises in Iceland. There is a mounting sense that capital controls hurt growth prospects, repressing local financial markets, scaring foreign investors, and impeding savings diversification, and that it is time for them...

This paper examines Iceland's expenditure policy, especially five expenditure pressure points, as well as capital flows and monetary policy effectiveness in small open economies. The postcrisis fiscal adjustment demanded painful choices, with spending on healthcare, education, and investment...

Iceland is experiencing an economic slowdown that has reduced overheating concerns. Tourism growth has decelerated and the krona has stopped appreciating. Demand management has become easier, allowing the authorities to focus on medium-term priorities, including infrastructure, healthcare,...