Iceland Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Iceland Country Risk Report
Product Price
$1,195.00

Core Views

  • Despite the rapid rise in popularity of Iceland's anti-establishment Pirate Party, we remain sceptical that it will win power in the April 2017 general elections. Instead, the Pirates' popularity will prompt the ruling coalition to pursue a more expansionary fiscal policy in 2016, which will allow it to regain public support.

  • Iceland's economic rebound will slow modestly in 2016, due to weaker demand from the eurozone and rising uncertainty around the lifting of capital controls this year.

  • The Icelandic krona will come under pressure with the start of capital account liberalisation in the coming months. Krona depreciation will add to rising wage-pull inflationary pressures in H116, warranting monetary tightening, which will stabilise the currency in H216.

Key Risks

  • The biggest risk to our forecast is policy trajectory, particularly in terms of how the current government chooses to remove distortive capital controls. Mishandling of the capital account liberalisation process has the potential to trigger a sell-off in the krona, Similarly, taking a hard stance with regards to capital withdrawals by foreign creditors could damage long-term investor sentiment towards Iceland.

Macroeconomic Forecasts (Iceland 2014-2017)
Indicator 2014e 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 1.9 4.1 3.8 2.9
Nominal GDP, USDbn 16.3 15.1 14.3 15.6
Consumer price inflation, % y-o-y, eop 0.8 2.0 3.0 2.5
Exchange rate ISK/USD, eop 127.51 130.10 150.00 142.86
Budget balance, % of GDP -0.2 0.0 0.1 0.1
Current account balance, % of GDP 4.4 3.2 2.1 0.9
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Rebound To Remain In Place, But To Slow Down
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
Monetary Policy
11
Gradual Lifting Of Capital Controls To Ensure Inflation And FX Stability
11
TABLE: NET EXPORTS FORECASTS
11
Monetary Policy Framework
12
Chapter 2: 10-Year Forecast
15
The Icelandic Economy To 2025
15
Settling Into More Moderate Long-Term Growth Trend
15
TABLE: LONG-TERM MACROECONOMIC FORECASTS
15
Chapter 3: Political Outlook
17
SWOT Analysis
17
BMI Political Risk Index
17
Domestic Politics
18
Pirate Party Popularity To Prompt Fiscal Expansion
18
TABLE: POLITICAL OVERVIEW
18
Long-Term Political Outlook
19
Few Major Threats On the Horizon
19
Chapter 4:BMI Global Macro Outlook
21
Global Macro Outlook
21
Tail Risks Mounting Amid Sub-Par Growth
21
TABLE: GLOBAL ASSUMPTIONS
21
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
22
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
22
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
23
TABLE: MACROECONOMIC DATA & FORECASTS
25

Assess your risk exposure in Iceland with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Iceland with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report