Iceland records first quarter growth of 4.6 percent

iceland-flagIceland recorded a 4.6 percent growth in its economy in the opening three months of 2013 compared to the final quarter of 2012.

However, despite the growth, Statistics Iceland revealed that investment and consumption figures were down. Inventories was a major factor behind the increase, growing by 4.7 percent, but household consumption only recorded a 0.7 percent rise and investment shrank by 0.6 percent.

The statistics agency said that due to troubles in correcting seasonal variations, it is better to take more notice of the annual comparison. Compared to the same quarter in 2012, growth between January and March slowed to 0.8 per cent, in comparison to an increase of 1.4 percent between October and December last year.

Iceland’s economy grew by 2.9 per cent in 2011 and by 1.6 percent in 2012.

The country’s previous government received widespread recognition for saving it from bankruptcy on the back of its three biggest banks collapsing in 2008; however, voters voting against austerity saw the government lose the general elections in April.

New president Sigmundur Davíð Gunnlaugsson has promised that his government will boost domestic investment and consumption by simplifying the tax code with lower taxes and, therefore, easing the pressure on mortgage holders.

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