## Iceland: 2018 Article IV Consultation-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Iceland

_IMF Staff Country Reports, November 14, 2018_

## Source details

**Canonical URL:** [Iceland: 2018 Article IV Consultation-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Iceland](https://www.imf.org/en/publications/cr/issues/2018/11/14/iceland-2018-article-iv-consultation-press-release-staff-report-staff-statement-and-46357)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/11/14/iceland-2018-article-iv-consultation-press-release-staff-report-staff-statement-and-46357/index.md)
- [Structured JSON version](/en/publications/cr/issues/2018/11/14/iceland-2018-article-iv-consultation-press-release-staff-report-staff-statement-and-46357/index.json)
- [Bundle manifest](/en/publications/cr/issues/2018/11/14/iceland-2018-article-iv-consultation-press-release-staff-report-staff-statement-and-46357/bundle-manifest.json)

## Bibliographic details
- Published: November 14, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484384749.002

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### Executive summary
- Iceland is experiencing an economic slowdown that has reduced overheating concerns.
- Tourism growth has decelerated and the króna has stopped appreciating.
- Demand management has become easier, allowing the authorities to focus on medium-term priorities, including infrastructure, healthcare, education, and the environment.
- Risks have become more evident: high fuel prices and other factors are challenging the airline business; world trade tensions are escalating; and the United Kingdom—a vital trading partner—is not yet assured of a smooth EU exit.
- Policy emphasis: increase resilience to shocks.

### Key findings and projections
- Slower economic activity has alleviated previous overheating pressures.
- Exchange rate: the króna has stopped appreciating.
- Tourism: growth has decelerated, reducing a key source of external demand.
- Policy space: easier demand management permits reallocation toward medium-term priorities (infrastructure, healthcare, education, environment).

### Risks and vulnerabilities
- High fuel prices are challenging the airline business.
- Escalating world trade tensions present external downside risks.
- Uncertainty about the United Kingdom’s exit from the EU poses risks for a vital trading partner.
- Overall policy implication: need to further increase resilience to shocks.

### Policy recommendations and priorities
- Use the eased demand-management stance to:
  - Focus on medium-term public investment in infrastructure.
  - Strengthen healthcare and education systems.
  - Address environmental priorities.
- Strengthen resilience against external shocks stemming from fuel price volatility, trade tensions, and Brexit-related uncertainties.

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr18318.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr18318.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/11/14/iceland-2018-article-iv-consultation-press-release-staff-report-staff-statement-and-46357_