“There are bright times ahead in the Icelandic economy.” Those are the first words of a new economic forecast through 2017 from the Icelandic Confederation of Labor, RÚV reports. Strong economic growth is forecast for the next two years, but inflation is expected to increase. Authorities had predicted substantial wage increases to fuel higher inflation.
Ólafur Darri Andrason, an economist for the Confederation, stresses the importance of using the state portion of the money from the winding-up proceedings of the failed banks to pay down public debt and support the welfare system.
Expensive election promises must be avoided, he says. As voters, we must “see through those and decline such offers fifteen minutes before elections.” The money must not be used for short-term investments, for that could fuel even higher inflation.
Ólafur welcomes news that the winding-up proceedings of the banks will allow for the lifting of capital controls. That, he says, eliminates a lot of uncertainty.