Investments in Iceland prompt 0.5% growth in Q4

New figures have revealed that Iceland’s economy saw further growth in the fourth quarter of 2012. According to official data published by Statistics Iceland on Thursday 7 March, the island nation’s GDP grew 0.5 per cent between October and December. Experts cited fresh investments into the country’s tourism sector in addition to an increase in consumer spending. The increase follows an impressive 4.8 per cent increase seen over the second quarter of the year.

The agency also said that output saw year-on-year growth of 1.6 per cent in 2012 and fourth quarter growth of 1.4 per cent, although exports fell by 0.1 per cent over the final three months of the year. Meanwhile, Gross fixed capital formation climbed by 4.3 per cent in the three months leading up to January.

The news comes as the North Atlantic nation’s recovery from its 2008 banking collapse continues to impress economic experts despite ongoing turmoil in the nearby eurozone. And in December, Sedlabanki – Iceland’s central bank – discontinued cycling interest rate increases designed to block spill over from Europe’s economic woes.

The bank said in a statement, “As spare capacity disappears from the economy, it is necessary that monetary policy slack should disappear as well”.

However, officials continue to push back the removal of capital controls that were created in the wake of crisis; the country’s Prime Minister said in January month that restrictions were likely to remain in place past the 2013 deadline for removal.