Iceland : Staff Report for the 2006 Article IV Consultation

1ISLEA2006001 Image
Price:  $15.00

Release Date: © August, 2006
ISBN : 978-1-45181-932-8
Stock #: 1ISLEA2006001
Stock Status: On back-order

Languages and formats available



Over the last three years, a rapid expansion in domestic demand has dramatically widened the current account deficit in Iceland. Demand expanded faster than supply, and evidence of overheating is widespread. Monetary policy has tightened, but, until recently, the impact has been channeled primarily through the exchange rate. Despite hikes in the policy rate, increased competition in the mortgage market eased household credit conditions, and household indebtedness has surged. The financial market turbulence early in the year ended the favorable conditions that had allowed banks to fund rapid balance sheet growth.


Balance of payments , Competition , Current account , Demand , Economic development , Economic policy , Fiscal policy , International trade , Monetary policy

More publications in this series: IMF Staff Country Reports