Vocational Education and Start Up Support Keys to Boosting Economy Skip to content

Vocational Education and Start Up Support Keys to Boosting Economy

By Yelena

Photo: Golli.

Central Bank Governor Ásgeir Jónsson says vocational education and financial support of start-up companies are the key actions needed to boost the Icelandic economy. Ásgeir shared those thoughts at an open meeting with Alþingi’s Economic Affairs and Trade Committee this morning, RÚV reports. The Central Bank’s economic forecast for the next two year has worsened.

“I am admittedly not speaking as the Central Bank Governor now but […] we have placed too much emphasis on book learning. We are seeing a lot of dropouts from secondary school and are seeing too many people who don’t receive education in any particular field and go out onto the labour market without education. I think we need to in some way emphasise vocational training much more.”

Worse economic outlook for 2020 & 2021

The Central Bank announced yesterday that its key interest rate would be lowered by 0.25 percentage points to 2.75%. The interest rate was lowered 1.5% last year (in stages) to 3.0%, a historic low that has now been outstripped.

Though leading indicators suggest that GDP growth was stronger in 2019 than previously assumed, the outlook for 2020 and 2021 has deteriorated, according to the Bank’s new macroeconomic forecast. Published this month, the forecast projects GDP growth will measure 0.8% this year, compared to 1.6% that was predicted in the November forecast. According to the Central Bank, “The poorer outlook is due primarily to headwinds facing the export sector and tighter financing conditions for domestic firms.”

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