Economy: progress and challenges
Bjarni Benediktsson and Ángel Gurría. Photo: Golli
Despite economic success and a positive outlook, key challenges remain for the Icelandic economy, according to a new report by the Organisation for Economic Cooperation and Development (OECD).
OECD Secretary-General, Ángel Gurría, visited Iceland this week and presented the main findings of the report at a press conference yesterday, together with Icelandic Finance Minister, Bjarni Benediktsson.
The report congratulates Iceland on having reduced inflation, public debt and unemployment and welcomes plans to lift capital controls.
Caution must, however, be exercised when lifting controls to ensure that economic stability is not affected. The report also warns that recent collective wage rises are way above productivity and inflation targets and that monetary policy will need close monitoring.
The OECD report is also upbeat about Iceland’s relatively equitable distribution of wealth and Iceland’s healthy growth forecasts. The economy is expected to grow by 4.3% this year and 2.7% in 2016 – both figures are considerably higher than the OECD average.
Iceland is over the worst, was Gurría’s main message at yesterday’s event, though important challenges still face the country’s economy.
The full report can be found here.
