Iceland continues to recover from its financial crisis. Economic growth strengthened in the second half of 2014 and GDP is approaching its pre-crisis peak level. Lower inflation, exchange rate stability, declining unemployment and improved fiscal accounts are all signs of macroeconomic normalisation. The recovery will continue to be driven by private consumption and business investment. While exports are projected to expand steadily, even with deteriorating competitiveness, they will be outpaced by imports and the current account balance will therefore deteriorate gradually.