Iceland’s gross domestic product advanced 2.6 percent year-on-year in the third quarter of 2018, easing from a downwardly revised 6.7 percent growth in the previous period. The slowdown was mainly due to a fall in fixed investment (-5.6 percent from 7.1 percent in Q2), as both business sector investment (-10.7 percent) and residential construction (-3.5 percent) declined. On the other hand, main contributions to growth came from private consumption (5.3 percent from 5 percent) and government expenditure (3.4 percent from 3.3 percent). Also, net foreign demand contributed positively to growth, as exports jumped 5.1 percent (from -1.1 percent in Q2) while imports went up at a much softer 0.6 percent (from -1.3 percent in Q2). On a quarterly basis, the economy showed no growth, after a downwardly revised 1.4 percent expansion in the second quarter. GDP Annual Growth Rate in Iceland averaged 3.53 percent from 1998 until 2018, reaching an all time high of 13.40 percent in the first quarter of 1999 and a record low of -8.70 percent in the fourth quarter of 2009.
GDP Annual Growth Rate in Iceland is expected to be 3.20 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate GDP Annual Growth Rate in Iceland to stand at 2.70 in 12 months time. In the long-term, the Iceland GDP Annual Growth Rate is projected to trend around 2.90 percent in 2020, according to our econometric models.