A new issue of Statistical Series, presenting a revised economic forecast for 2018–2024, is now available. GDP is expected to increase by 1.7% in 2019. The growth is significantly lower than the 4.4% average growth rate for the last five years. The worsening economic outlook for this year is mostly derived from lower than expected exports, with 3% increase in gross national expenditure. GDP growth is expected to be between 2.5-2.8% in the next years. Growth in private consumption is expected to slow down to 3.6% in 2019. It is estimated that public consumption will increase by 2.7% in 2019, taking into account changes in fiscal budgets of central and local governments that were approved in December 2018.
Investment has slowed down recently and is expected to increase by 1% this year, but that the pace will pick up after that. It is expected that investment levels as a share of GDP will be slightly above the 20-year average of 22%. The outlook for foreign trade is weaker than in the last forecast, due to greater uncertainty in tourism and a contraction in the supply of flight offerings to the country. Exports are expected to grow by 1.6% in 2019.
The depreciation of the króna last autumn resulted in a more negative inflation outlook. Inflation is expected to be 3.8% this year, significantly influenced by the exchange rate. There is considerable uncertainty involving the inflation outlook due to changes in tourism and the outcome of the current wage contract negotiations, which covers the major part of the labour market.
The last economic forecast was published on the 2nd of November 2018. The next forecast is scheduled for May 2019.
Economic forecast, winter - revision - Statistical Series