The Prime Minister of Iceland, Geir Haarde, said the economy could evade a recession forecast by the Ministry of Finance and the Icelandic Central Bank, reports Bloomberg.
“I am not so sure we will actually have negative growth rates,” said Haarde in Latvia last week. It is “one of the objectives of the government to ensure that we don’t go into a recession.”
Both the Ministry of Finance and the Central Bank have said the Icelandic economy will contract in 2009 after interest rates rose to a record 15.5 per cent in response to heightened inflation.
A 24 per cent drop in the Icelandic krona (ISK) against the euro this year has helped push inflation to an 18-year record of 12.3 per cent in May.
However, growing exports have slashed Iceland’s trade deficit to 600 million kronur ($7.7 million) in May from 7.3 billion kronur in 2007, boosting economic growth as imports slow.
Haarde said the krona “is more likely to come back up than go down. I think it will find a new equilibrium at a level quite a lot higher than it is now.”
The krona has fallen following concerns that the credit crunch may limit Icelandic banks’ access to funding, though Nordic bank Glitnir last week reported that the real exchange rate of the ISK rose in May according to figures from the Central Bank.
The Prime Minister’s comments follow moves by the Central Bank to increase its reserves of foreign currency. The government recently approved a bill allowing the bank to borrow as much as 500 billion kronur ($6.4 billion) in foreign currencies, equivalent to more than a third of Iceland’s GDP.
Do a internet search and see how bad you country looks to the world, your pride will hit zero, nasty people the world needs intelligent countries to show the way and yours looks bad, nature needs to be preserved at all levels.
tourisim and dollars will not come while the world thinks you are backward thinking people, try and think about it if you can
I am happy for my email to be published and my ph number
61 3 0418306452
stop killing whales and destroying nature
Garry Broomfield
Australia
Our country was also hit hard by the Economic Recession. At least we are seeing some signs of economic recovery now. I hope that we could recover soon from this recession.
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Our country had been so much affected by this Economic Recession. there are lots of job cuts and company shutdowns. We are seeing some signs of economic recovery right now and we hope that it would continue.
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@Janet and Cameron.
What country are you talking about? Not Iceland for sure!!!
This ‘Cameron’ is blog spamming posting to get hes link popularity up for site he did use in his link.
And reading this news item again from June 2008 — oh it does take me back.. back in time to the time before Lehmans Brothers did fall and all hell did brake loose.