A new issue of Statistical Series, presenting the economic forecast for 2014-2018, is now available. The Icelandic economy is predicted to grow by 3.1% in 2014 and by 3.4% in 2015. National expenditure will rise by 5.2% in 2014 and 4.8% in 2015 reflecting strong growth in investment and consumption. Private consumption is expected to grow by 3.9% in 2014 while investment will grow by 16.9%. For 2015, private consumption is predicted to increase by 3.7% and by close to 3% per year in 2016-2018. In 2015 investment will grow by 15.7% and increase for the remaining years excluding 2017. Public consumption will grow by 1.2% in 2014, 0.5% in 2015 and nearly 2% per year during 2016-2018.
The government's planned debt relief programme and aggregate real wage increases, bolstered by strong labour market growth in recent quarters, are expected to support private consumption during the forecast period.
Inflation for 2014 is predicted to be at the Central Bank's target rate of 2.5%. A large part of wage contracts for 2014 have been finalized, but most are short term, increasing wage and price uncertainty in the coming years.
The last economic forecast was published on April 11 2014. The next forecast is scheduled for November 2014.
Economic forecast, summer 2014 - Statistical Series