The Ministry of Finance is predicting that the year 2009 will be the worst year of the crisis. The Althingi parliament accepted the new budget bill yesterday with an estimated ISK 150 billion (USD 1.2 billion, EUR 870 million) deficit to the state budget next year.
“We believe the year 2009 will be the deepest year of the depression and therefore we are trying to be careful so that the state will not deepen it even further with its actions,” Minister of Finance Árni M. Mathiesen said in his speech at parliament, Morgunbladid reports.
The minister added that the international crisis and the collapse of Iceland’s bank system had naturally made its mark on the budget bill and the state’s finances in the coming years.
Inflation in Iceland is currently 18 percent and has not been higher for almost 19 years.
The parliament is now closed for the holidays and will not resume its operations until January 20.