Dagens Industri, Sweden’s most influental financial newspaper, recently reported that Iceland is well on its way to economic recovery following the financial collapse in 2008. According to Dagens Industri, Iceland had a positive GDP increase last quarter for the first time in two years.
The financial newspaper goes on to report that the sacrifices made during the first two years, such as Icelanders watching their currency plunge and living standards dropping to a similar level in 2003, are starting to pay off.
Dagens Industri reported that households involved in the last wave of home purchases are still struggling, but overall the situation is far better than the end of 2008.
Iceland’s unemployment rate is at 6.4 percent, which is very competitive compared to many European countries considered to be in better economic shape. The key interest rate is down from 18 percent to 4.5 percent.
Iceland’s ability to let its independent currency take the hit is described in the article as an important factor for the country’s quick economic turnaround.
According to Dagens Industri, the outlook for an Icesave agreement with the British and the Dutch is looking favourable for Iceland. It writes that the interest rate is likely to be half of the 5.5 percent that was previously discussed and that the reconstruction of Landsbanki’s assets is going so well that the total Icesave amount has dropped considerably.
However, the article also points out that even though Iceland is currently in recovery mode it still has a long way to go.
The article in Swedish can be found here: http://di.se/Artiklar/2010/12/8/222168/Islandsk-kris-pa-vag-upp-i-rok/