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No economic growth in northwest Iceland

A recent report by the University of Iceland on economic development in Iceland from 1998 to 2004 shows economic growth in all parts of the country except for the Westfjords and northwest Iceland.

The capital area saw the most economic growth in this period, especially in 2004 when the growth rate surpassed ten percent. Fréttabladid reports.

According to the report, the fishing industry is in decline in all parts of the country and has declined the most in the Westfjords and in northwest Iceland.

The leading factor for economic growth in west Iceland and the Eastfjords is probably heavy industry, the report concluded. The Eastfjords, where a large Alcoa aluminum smelter is currently under construction, saw the most economic growth after the capital area.

Halldór V. Kristjánsson, an expert in urban development who took part in the study, told Fréttabladid that the report’s results confirm his suspicion about stagnation in the Westfjords and northwest Iceland.

Kristjánsson said people tend to move away from these areas to places where they are likely to get a higher salary.

Kristjánsson said this development is dangerous, because these areas might end up being deserted. In his opinion the government should try to influence economic growth in the Westfjords and northwest Iceland in cooperation with the inhabitants.

Kristjánsson believes the capital region has grown even more in 2005 and 2006 than in 2004, and will continue to grow economically and influence growth in nearby areas.

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