Bloomberg News

Iceland Economy Grew 0.5% Last Quarter as Investments Surged

March 08, 2013

Iceland’s economy grew in the fourth quarter as consumer spending picked up and investment in the island’s tourism industry surged.

Gross domestic product gained 0.5 percent from the previous quarter, after rising 4.8 percent in three months through September, Reykjavik-based Statistics Iceland said in a statement on its website today. Output expanded 1.4 percent from a year earlier and 1.6 percent overall in 2012, the office said.

Iceland is emerging from its 2008 banking meltdown and economic collapse even as Europe struggles to contain a debt crisis in its fourth year. The island’s central bank in December halted a cycle of interest rate increases to protect the economy from the fallout of the euro-area crisis.

Exports fell 0.1 percent from the previous quarter, while household spending increased 1.5 percent, recovering from a 0.5 percent decline in the third quarter, the agency said. Gross fixed capital formation rose a quarterly 4.3 percent.

The central bank said in February that “as spare capacity disappears from the economy, it is necessary that monetary policy slack should disappear as well.”

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net


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