IMF Staff Country Reports

Iceland: Sixth Post-Program Monitoring Discussions

Publication Date:

June 26, 2015

Electronic Access:

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Summary:

This paper discusses the recommendations of the Sixth Post-program Monitoring Discussions with Iceland. Iceland recently updated its capital account liberalization strategy. The strategy takes a staged approach, starting with steps to address the balance-of-payments overhang of the old bank estates—prioritizing a cooperative approach with incentives—in a manner consistent with maintaining stability. Growth is accelerating in 2015 and is expected to reach 4.1 percent, backed by significant investment, wage- and debt relief-fueled consumption, and booming tourism. The general government is projected to record a surplus of 0.8 percent of GDP in 2015, helped by large one-offs. Small deficits are also expected over 2016–20.

Series:

Country Report No. 2015/160

Subject:

Balance of payments Capital account liberalization Expenditure Fiscal policy Gender Gender budgeting Income Labor National accounts Wages