Minister of Finance Casts Doubt on Indexation Abolishment Skip to content

Minister of Finance Casts Doubt on Indexation Abolishment

Minister of Finance Árni M. Mathiesen said it is a matter of opinion whether indexation of loans should be abolished in Iceland, as Minister of Commerce Björgvin G. Sigurdsson has suggested, stating it has played an important part in the economy.

But recently questions have surfaced on whether the indexation has negative influence on the economic administration. “I believe people haven’t reached any general conclusion on that and I don’t think people should discuss changes until a scientific conclusion has been reached,” Mathiesen told Morgunbladid.

Managing director of Gildi Pension Fund Árni Gudmundsson agrees. He said that if indexation is abolished it will have an impact on the pension funds, because a large part of their assets are in indexed debentures.

“This has always been our reality and our presumptions are based on these assets being indexed,” Gudmundsson said. When loans are indexed they grow with inflation, and such an arrangement is not known in euro countries.

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