Wednesday, 8 December 2021

Iceland Cuts Rates Again In Race To Beat Recession

Ómar Óskarsson

REYKJAVIK: Iceland’s central bank lowered its key interest rate for the third time this year as it battles with recession after a decade of solid growth.

The bank cut its benchmark seven-day deposit rate by 0.25 points to 3.5 percent.

It had already slashed the rate in May, and then again in June.

The bank expects Iceland’s economy to contract by 0.2 percent this year, less than forecast in the spring, it said.

But at the same time the outlook for next year has worsened as the crucial tourism sector has been slow to recover from a slump.

“The GDP growth outlook for 2020 has deteriorated,” the bank said,”as it now appears that it will take longer for tourism to recover after thisyear’s setbacks”.

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