Rating agency Moody’s expects a moderate economic growth of 2.5 percent to take place in Iceland this year and next, according to a new report where the Icelandic state’s credit rating is confirmed as Baa3 with negative outlook.
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Moody’s states that Iceland’s credit rating will be increased if there are indications of a powerful and permanent economic recovery, continued restraint in state finances and stability of the Icelandic króna while capital controls are lifted, visir.is reports.
However, the credit rating could drop if restraint in state finances is relaxed or the Icesave disputes leads to higher obligations for the Icelandic state than currently seems to be the case.
In the latest issue of Morgunkorn, the newsletter of Íslandsbanki’s research department, Moody’s evaluation is covered. The rating agency is said to evaluate the strength of the Icelandic economy to be average.
In spite of significant recession following the banking and foreign currency crisis in Iceland the country continues to be among the world’s wealthiest judging by gross domestic produce per capita, the newsletter concludes.