Icelandic growth is set to hold up well with tourism booming despite the strength of the króna and with the financial imbalances that caused the previous crisis largely resolved. But inflation is a threat. If unions secure large wage gains in negotiations this year, the Central Bank of Iceland (CBI) might have to hike interest rates aggressively, potentially causing sharp downturns in asset prices and economic growth.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services