Iceland: Selected Issues

June 22, 2017

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Format: Chicago

Iceland: Selected Issues, (USA: International Monetary Fund, 2017) accessed July 20, 2025

Summary

This paper analyzes the explosion of tourism in Iceland, which has surged above all expectations. The number of tourists has almost quadrupled since the Eyjafjallajökull eruptions in 2010, establishing tourism at the heart of the economy. Tourists do not seem to be driven mainly by rising incomes at home, nor have they been deterred by rising costs on the back of króna appreciation—which leaves Iceland’s tourism boom largely unexplained by standard econometric models. Instead, Iceland’s natural wonders, welcoming atmosphere, general safety, improving connectedness, and social media outreach have drawn in visitors. Going forward, tourism is likely to grow less rapidly than in recent years, yet remain at strong levels.

Subject: Bank credit, Credit, Economic sectors, Financial services, Inflation, Money, Prices, Real interest rates, Tourism

Keywords: Bank credit, Bank credit growth, CR, Credit, Europe, Global, Iceland, Inflation, ISCR, LWPRF model, Macroeconomic variable, NRIR estimate, Post GFC recovery, Real interest rates, Tourism, Tourism competitiveness report

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/164
Stock No:

1ISLEA2017002
ISBN:

9781484304983
ISSN:

1934-7685

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