Value of Exported Goods Increases Significantly

Eimskip Dettifoss

The value of exported industrial, marine and agricultural products has increased significantly over the past three years, RÚV reports (referencing compiled statistics published in Fréttablaðið).

During the first four months of 2022, goods have been exported for almost ISK 319 billion ($2.3 billion / €2.3 billion), compared to ISK 197 billion (($1.5 billion / €1.4 billion) during the same period in 2020.

The value of exported marine products amounted to ISK 118 billion ($874 million / €842 million) during the first four months of this year, compared to ISK 81 billion ($600 million / €578 million) in 2020.

The value of exported agricultural goods, including farmed fish, totalled ISK 20 billion ($148 million / €143 million) during the first four months of 2022, compared to ISK 11 billion ($81 million / €79 million) in 2020.

Finally, the value of exported industrial products is up by 75% – from ISK 99 billion ($733 million / €707 million) to ISK 175 billion ($1.3 billion / €1.2 billion) – during the first four months of this year as compared to 2020. A significant factor in that regard is that exported aluminium’s value has doubled compared to two years ago.

Broke Her Own Icelandic Record at Tokyo Olympics

swimmer Snæfríður Sól Jórunnardóttir

Icelandic swimmer Snæfríður Sól Jórunnardóttir broke her own Icelandic 200-metre freestyle record at her first-ever Olympic event in Tokyo today. She completed the event in 2:00.20, beating her previous record of 2:00.50 by 30/100 of a second.

Despite the impressive personal success, Snæfríður was the last of eight swimmers in Heat 3 and therefore will not proceed to the semifinals for the event. The swimmer will, however, compete in the 100-metre freestyle on Wednesday.

Snæfríður is one of four Icelanders competing in the Olympics this month and was one of Iceland’s two flagbearers in the opening ceremony last Friday. She is from Hveragerði, South Iceland and now lives in Denmark.

GDP Expected to Contract by 8% in 2020

Central Bank of Iceland

In its most recent quarterly report, the Financial Stability Committee of the Central Bank expects GDP to contract by 8% in 2020. The report notes that while Iceland’s three commercial banks are in a strong capital and liquidity position, there is the risk that the Central Bank’s easing of policy instruments could lead to an increase in asset prices and an increase in the likelihood of systemic risk within the economy.

The financial system on “sound footing”

The Financial Stability Committee (FSC) of the Central Bank is required to assess the value of the countercyclical capital buffer (i.e. macroprudential instruments to help counter procyclicality in the financial system) on financial institutions on a quarterly basis.

In accordance with this obligation, the FSC has published its newest quarterly report, which forecasts that GDP will contract by 8% this year. The report notes that despite the effects of the COVID-19 pandemic, Iceland’s financial system is “on sound footing,” with private sector balance sheets having grown stronger in recent years, reinforced by deleveraging and higher equity ratios.

Despite positive measures taken by the Central Bank, however, the report also states that the pandemic has accelerated the contraction of the tourism industry and the reduced access to corporate loans from financial institutions, a trend that began last year.

A possible “wave of insolvencies”

The report further outlines a number of negative side effects that can be traced to the pandemic: uncertainty about Iceland’s foreign currency revenues; a possible “wave of insolvencies” among companies in the tourist sector; a drop in aluminium prices; the disruption of marine-product sales; rising unemployment; and a drop in commercial property prices (residential property prices remain relatively unchanged).

Over the past weeks and months, the Government and the Central Bank have responded to the crisis with the adoption of wide-ranging measures, including expanding access to credit and the lowering of financing costs. These measures – which could help to reinvigorate the economy – do not come without some risk, however:

“The low-interest environment resulting from pandemic response measures exacerbates the risk of a debt bubble, either in specific sectors or in the broader economy, at a time when the financial stability policy stance is more accommodative than before. This could undermine financial stability in the coming term. It is therefore essential to take appropriate action if increased risk appetite leads to excessive credit growth when the impact of the pandemic tapers off and the economy starts to recover.”

Unemployment to reach its zenith

Haukur C. Benediktsson, Director of Financial Stability at the Central Bank, and Ásgeir Jónsson, Governor of the Central Bank, introduced the report’s findings in a press conference earlier today. Summarising the findings of the report, Haukur predicted that unemployment would reach previously unknown levels in 2020. The FSC  expects unemployment to peak at between 7.4-10% in 2020, with labour-intensive sectors to be hit the hardest:

“The COVID-19 pandemic and its implications have had a profound impact on Icelandic households. The most serious is the impact on the labour market, with many companies scaling down or even halting operations. As a result, large numbers of employees have either had their working hours reduced or have lost their jobs entirely. Unemployment has soared and, according to the Bank’s most recent macroeconomic forecast, is expected to approach 12% in Q3 and measure 9% for the year as a whole, as compared with 3.6% in 2019 and the post-crisis peak of 7.6% in 2010.”

Record Number of Refugees to Be Received in 2020

Refugees protest in Reykjavík

According to a statement on the Government Offices’ website, the Icelandic government recently approved a proposal from the Refugee Committee to receive 85 refugees, in collaboration with the UN Refugee Agency, in 2020 – a record number.

The proposed acceptance is in line with the government’s agreement, which provides for the increased reception of refugees:

“Never before have there been more refugees in the world due to armed conflict, persecution and environmental catastrophes. Iceland will make its contribution to solve [sici] the refugee crisis and will accept more refugees.”

Three Different Regions

The government plans on accepting refugees from three different regions: Lebanon, Kenya, and Iran.

Syrian nationals account for the greatest portion of international refugees. Conditions for Syrian refugees in Lebanon continue to worsen. Of the approximately 55% of Syrian children who are without access to formal education, 40% have no access to education of any kind. Less than 5% of Syrian children between the ages of 15 and 18 have access to education, the statement reads.

Refugees from Kenya will also be accepted. The UN Refugee Agency estimates that approximately 45,000 individuals are currently in dire need of being extricated from Kenya as quota refugees. The agency has designated four groups, in particular, that are at risk: queer refugees; refugees from South Sudan; refugees involved in politics, human rights activism, or journalism; and special-needs refugees from Somalia.

Finally, Afghani refugees from Iran will also be received. There are an estimated 2.6 million Afghani refugees, many of whom have spent considerable time in refugee camps. Afghani women and girls are especially vulnerable, owing to sex-related violence, forced marriage, and other traditions related to heritage, sex, and class.

247 Refugees Resettled

Since 2015, a total of 247 refugees have been accepted into Icelandic society by 15 municipalities. The majority of these refugees are Syrian but they have also come from Iraq, Uganda, the Republic of the Congo (Congo), Zimbabwe, Rwanda, Sudan, and Cameroon. The UN Refugee Agency estimates that there is a total of 19.9 million refugees in the world today – ca. 1.5 million of whom are in dire need of being accepted as quota refugees (only 4% of which were delivered to safety last year).

According to an article on the World Economic Forum this June, Canada resettled more refugees than any other country last year, or approximately 28,000. This number accounts for approximately 0.00074% of Canada’s population (ca. 37.5 million). The total number of refugees that Iceland hopes to resettle in 2020 will account for approximately 0.00024% of Iceland’s population (ca. 360,000).