Continued Bleak Economic Outlook in Iceland Skip to content

Continued Bleak Economic Outlook in Iceland

The Confederation of Icelandic Employers (SA) is predicting a difficult winter for Iceland’s economy with high interest rates and limited access to loan capital. One third of companies within SA have made cutbacks this year or plan to do so.

“Every week that passes is expensive,” managing director of SA Vilhjálmur Egilsson told 24 Stundir, referring to high interest rates.

Egilsson added that he has not noticed many layoffs yet. “But if the circumstances remain like they are now the situation will worsen steadily.”

According to a recent SA poll, 31 percent of member companies have suffered from a shortage of liquid funds. “The situation will be very difficult if one third of companies are so weak that they are about to face serious problems,” Egilsson said.

Höskuldur Ásgeirsson, CEO of Nýsir real estate company, agrees. “I think people haven’t realized yet how difficult the coming winter will be.”

Ásgeirsson said there are no signs that indicate that the situation of the Icelandic economy is about to improve in the near future. “It takes a considerable amount of time for control measures to take effect.”

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