{
  "title": "Iceland: 2025 Article IV Consultation-Press Release; Staff Report and Statement by the Executive Director for Iceland",
  "publication": "IMF Staff Country Reports, June 24, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2025/06/23/iceland-2025-article-iv-consultation-press-release-staff-report-and-statement-by-the-567916",
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  "summary": "The 2025 Article IV Consultation discusses that growth decelerated in 2024 but is expected to rise to 1.6 percent in 2025 and 2.2 percent in 2026, while inflation is projected to decline to the Central Bank of Iceland’s 2.5 percent target in the second half of 2026.",
  "sections": [
    {
      "heading": "Key economic outlook and projections",
      "content": "- Growth decelerated in 2024.\n- Growth is expected to rise to 1.6 percent in 2025 and 2.2 percent in 2026.\n- Inflation is projected to decline to the Central Bank of Iceland’s 2.5 percent target in the second half of 2026.\n- The direct impact of escalating global trade tensions is projected to be limited."
    },
    {
      "heading": "Fiscal policy assessment and recommendations",
      "content": "- The authorities’ plans to turn the fiscal deficit in 2024 into a surplus by 2028 are appropriate given the need to rebuild buffers.\n- Details on the planned fiscal measures to achieve these targets have enhanced the credibility of the consolidation.\n- Policy implication: continue implementing the planned consolidation to rebuild fiscal buffers."
    },
    {
      "heading": "Monetary policy and reserves",
      "content": "- Monetary policy is suitably tight given still elevated inflation.\n- Recommendation: the monetary stance should be reduced as inflation declines.\n- Efforts to raise foreign exchange reserve coverage are welcome."
    },
    {
      "heading": "Structural policies and medium-term growth",
      "content": "- Investments in physical and human capital are needed to support medium-term growth.\n- Continued efforts to promote innovation and reduce skills mismatches are needed.\n- Taxation can play a supportive role in reducing housing market imbalances.\n\nIceland: 2025 Article IV Consultation-Press Release; Staff Report and Statement by the Executive Director for Iceland\n\n---\n\n Content in this bundle\n\n- 1islea2025001-print-pdf\n  - 1islea2025001-print-pdf (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1islea2025001-print-pdf (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 24, 2025",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798229014298.002",
    "Growth decelerated in 2024.",
    "Growth is expected to rise to 1.6 percent in 2025 and 2.2 percent in 2026.",
    "Inflation is projected to decline to the Central Bank of Iceland’s 2.5 percent target in the second half of 2026.",
    "The direct impact of escalating global trade tensions is projected to be limited.",
    "The authorities’ plans to turn the fiscal deficit in 2024 into a surplus by 2028 are appropriate given the need to rebuild buffers.",
    "Details on the planned fiscal measures to achieve these targets have enhanced the credibility of the consolidation.",
    "Policy implication: continue implementing the planned consolidation to rebuild fiscal buffers.",
    "Monetary policy is suitably tight given still elevated inflation.",
    "Recommendation: the monetary stance should be reduced as inflation declines.",
    "Efforts to raise foreign exchange reserve coverage are welcome.",
    "Investments in physical and human capital are needed to support medium-term growth.",
    "Continued efforts to promote innovation and reduce skills mismatches are needed.",
    "Taxation can play a supportive role in reducing housing market imbalances.",
    "**1islea2025001-print-pdf**"
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