OECD Economic Surveys: Iceland

Frequency :
Every 18 months
1999-0308 (online)
1995-3240 (print)
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OECD’s periodic surveys of the Icelandic economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

Also available in: French
OECD Economic Surveys: Iceland 2015

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01 Sep 2015
Pages :
9789264240513 (EPUB) ; 9789264240490 (PDF) ; 9789264240414 (print)

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This 2015 OECD Economic Survey of Iceland examines recent economic developments, policies and prospects. The special chapters cover: Promoting stability and resilience; supporting long-run growth.

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  • Basic statistics of Iceland, 2014

    This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The Economic situation and policies of Iceland were reviewed by the Committee on 23 June 2015. The draft was revised in the light of the discussion and given final approval as the agreed report of the whole Committee on 15 July 2015.The Secretariat's draft report was prepared for the Committee by Douglas Sutherland and Jonathan Millar under the supervision of Patrick Lenain. Damien Azzopardi and Valery Dugain provided the statistical research assistance, and Brigitte Beyeler provided the administrative support. The Survey also benefited from contributions by Gunnar Haraldsson.The previous Survey of Iceland was issued in June 2013

  • Executive summary
  • Assessment and recommendations
  • Progress in structural reform

    The objective of this Annex is to review action taken since the previous Survey (June 2013) on the main recommendations from previous Surveys, which are not reviewed and assessed in the current Survey.

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    • A policy framework to promote stability and resilience

      Iceland’s openness to global capital and goods markets has contributed to fast-rising living standards over the past decades. Nonetheless, its unusual status as a very small open economy with an independent currency has left the country susceptible to macroeconomic instability. The banking sector’s collapse of 2008 and 2009 was the latest example, when financial turbulence from abroad was amplified by serious shortcomings in domestic policy. Countries can promote stability without resorting to capital controls or exchange-rate pegs by implementing well-designed frameworks for monetary policy, fiscal policy and financial regulation. In addition, resilience to destabilising capital flows can be bolstered by maintaining precautionary buffers, notably substantial holdings of foreign exchange reserves, as well as ample bank capital buffers and fiscal space.

    • Supporting long-term growth by improving the business environment

      Iceland has a high standard of living in international comparison, but amongst OECD countries its relative ranking has been sliding. In the wake of the financial crisis, investment slumped and while the economic recovery has progressed, growth is appreciably slower than during the previous expansion. In particular, labour productivity growth has remained very weak. Against this background, policies that improve the business environment will help lift productivity growth through encouraging innovation and competition. A wide range of policies can have an impact. The regulatory environment for product markets is generally among the least restrictive economies in the OECD, but the regulatory stance is uneven. Regulations governing barriers to entrepreneurship are notably more restrictive. Strengthening competitive pressure is another means of encouraging greater efficiency and innovation, but achieving this is complicated in a small economy. Raising human capital levels amongst certain groups will also boost growth and facilitating resource reallocation can play a role in reacting to economic shocks while supporting productivity growth. Finally, public policy fostering innovation and firm creation can underpin a dynamic part of the economy, which would otherwise experience financing difficulties.

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