In a new report on Iceland, the International Monetary Fund (IMF) claims that the medium-term economic outlook in Iceland is “enviable” and that institutions and policy frameworks are strong. The report reads: “Markets are open and flexible, and the skillful management of the country’s natural endowments has diversified the economy and helped to ensure sustainability. Further, these factors are combined within a culture of entrepreneurial dynamism that has led to economic outcomes that belie the country’s small size.”
On the other hand, the report warns, a mounting imbalance in the economy threatens stability, and this is something that policymakers must address. Excess demand and high and rising inflation are among factors that cause concern. Economic growth is forecast at around 4 percent this year.
The IMF report is published in its entirety on the website of the Central Bank of Iceland (www.sedlabanki.is).