IMF predicts end to Iceland recession this year

IMF2The IMF says there are increasing signs that Iceland’s recession, although deep, will not be as harsh as feared and economic growth is expected to start again some time this year, despite a predicted 3 percent recession in 2010 as a whole.

These predictions come from an IMF report issued following the fund’s second review of its Iceland recovery package, which took place last week. The report includes growth forecasts of 2.3 percent next year, 2.4 percent in 2012, 2.6 percent in 2013 and 4 percent in 2014.

This seemingly good news also comes with positive unemployment predictions. The IMF predicts 9.7 percent unemployment in Iceland this year, 8.6 next year and three percent in 2014. Predicted inflation next year is 3.8 percent and down to 2.5 percent in 2014, reports.

The IMF report says that the goals and objectives of its programme in Iceland are being met by itself and the Icelandic government and predicts and end to the recession this year. The report states, however, that private sector business debt and currency exchange restrictions are hampering the return to growth; but that the uncomfortable currency controls are helping in the essential task of stabilising the krona.

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