Finance Minister: Budget Bill in Line with Forecast Skip to content

Finance Minister: Budget Bill in Line with Forecast

Minister of Finance Steingrímur J. Sigfússon said when he presented the 2011 budget bill at parliament yesterday that considering the economic uncertainty there isn’t much divergence from the most recent economic forecasts for next year and the economic forecast of Statistics Iceland which was published in June and the budget bill is based on.

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Minister of Finance Steingrímur J. Sigfússon. Photo by Páll Kjartansson.

Statistics Iceland predicts a 3.2 percent economic growth next year. Sigfússon said that claims have been made that the conditions for such growth were out the window because of delay to the construction of the aluminum smelter in Helguvík, southwest Iceland, mbl.is reports.

However, the forecast only takes the first stage of the Helguvík smelter operations into account and it did not anticipate the extensive investments in the smelter in Straumsvík which were recently announced, the minister reasoned.

Sigfússon also said Statistics Iceland had assumed more significant unemployment than in the current outlook, a weaker real exchange rate than turned out to be the case and a low economic growth in many of the countries Iceland trades with which has now proven to be higher than expected.

The new budget bill assumes ISK 33 billion (USD 295 million, EUR 213 million) in cutbacks to state expenses, which could have serious consequences for healthcare institutions around the country.

While the bill was discussed at Althingi yesterday, a small number of protestors beat barrels outside the parliament, among them MP for The Movement Birgitta Jónsdóttir.

Click here to read more about the protests and here to read more about the cuts to healthcare.

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