Iceland: The following represents a general Table of Contents outline for the Country Economic Forecast.
The actual report may cover any or all of the topics listed below. - Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview - Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following: - Domestic demand - Private consumption - Fixed investment - Stockbuilding (% of GDP) - Government consumption - Exports of goods and services - Imports of goods and services - Unemployment - Consumer prices - Current account balance (US$ and % of GDP) - Government budget (% of GDP) - Short-term interest rates (%) - Long-term interest rates (%) - Exchange rate (vs. US dollar) - Exchange rate (vs. euro) - Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts - Charts and Tables - covering a full range of economic developments relevant to the time period covered. These could include such topics as: - Contributions to GDP growth - Monthly industrial output - Business and consumer confidence - Unemployment rate - Retail sales - Prices and earnings - Consumption and investment - Government balance and debt - GDP and industrial production - Monetary policy and bond yields - Background Information on the country - One or two pages of text covering the main historical political and economic factors that determine the country's current position - Key Facts on the country - Map of the country - Key political facts - Long-term economic and social development - changes since 1980 - Structure of GDP by output - latest year - Long-term sovereign credit ratings and outlook - Corruption perceptions index- latest year - Structural economic indicators - changes since 1990 - Destination of goods' exports -prior years - latest year - Composition of goods & services exports - latest year
The economy grew by close to 3.5% last year, with the current account surplus at 4% of GDP as export growth resumed earlier than expected. With exports slackening this year, due mainly to subdued Eurozone markets and a stronger ISK, GDP has since fallen. However, year-on-year GDP growth was still 2.4% in Q2 (after a 1.3% decline in Q1), and the annual pace is expected to remain around this level. Our forecast is for 2-2.5% growth in both 2014 and 2015, with inflation peaking next year at just over 2.5%. A tight fiscal and monetary rein will still be needed over the forecast period, leaving recovery largely reliant on exports and keeping medium-term growth a little below 3%, with a peak expected in 2016. Risks remain on the downside, with potential for another ISK correction, faster inflation, forced monetary tightening and a drop in investment if new capital inflows are insufficient when controls are removed. And the current account improvement could be reversed if tourism hits capacity limits, or if EU trade disputes break out again after the retreat from accession talks.