The Economist Intelligence Unit expects the government coalition of the centrist Progressive Party (PP) and the centre-right Independence Party (IP) to remain in office during 2014-15, and beyond.
Economic policy will focus on boosting the fishing industry, heavy industry, oil exploration, privatisation and trade/investment. Iceland's free-trade agreement with China came into effect on July 1st 2014.
Inflation moderated to an estimated 2.4% in 2014 from 3.9% in 2013 owing to a stronger currency. Base effects and a positive output gap will then lift inflation to 2.8% in 2015, before it eases to 2.6% in 2016.

Summary 7

Basic data 8

Political structure 9

Economic structure 10

Annual indicators 10

Quarterly indicators 11

Comparative economic indicators 12

Outlook for 2015-16 13

Political outlook 13

Economic policy outlook 14

Economic forecast 16

Recent analysis 19

Politics 19

Economy 23

International assumptions summary 16

Forecast summary 18

Gross domestic product 18

Consumer price inflation 18

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