Foreign tourists’ share of private consumption in Iceland has grown exponentially since 2008, and is still fast increasing. This growth has been attributed to a general increase in tourism, as well as the weakening of the Icelandic króna in relation to other currencies, ruv.is reports.
In 2013, the average proportion of private consumption ascribed to tourists was 14 percent, or every seventh ISK spent on consumer goods. It appears as though that number will be even higher in 2014.
Supporting that is a recent quarterly report on private consumption for the months of January through March, the least tourist-heavy quarter of the year, which showed that tourists were responsible for 10 percent of total consumption. In comparison, consumption in the same quarter last year totaled 8.7 percent.
In the years leading up to the turn of the century, tourists’ spending only constituted about 4 percent of total consumption. That number did not increase much until the 2008 economic collapse, when it hovered just below 5 percent. Following the collapse, however, and the consequent weakening of the Icelandic currency, this changed fast. By 2012 it was already at 12 percent.
Last year, in the most tourist-heavy quarter of July to September, foreign spending was at 24 percent.
Speculation of further growth this year is substantiated by recent reports that foreign tourists were behind a third of all credit card payments in the month of May.