The economy of Iceland shrank 0.1 percent year-on-year in the third quarter of 2019, following a 2 percent expansion in the previous period. Government expenditure slowed (2.9 percent from 3 percent); and net foreign trade contributed negatively to the GDP, as exports dropped 12.9 percent (from -6.8 percent in Q2) and imports fell at a softer 8.6 percent (from -12.2 percent in Q2). Meanwhile, gross fixed capital formation rebounded (2.9 percent from -10.4 percent); and household spending (2.1 percent from 1.6 percent) and inventories rose at a faster pace (1 percent from 0.6 percent). On a quarterly basis, the economy contracted 0.7 percent, after growing 3.1 percent in the prior quarter. GDP Annual Growth Rate in Iceland averaged 3.56 percent from 1995 until 2019, 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 -0.50 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 1.70 in 12 months time. In the long-term, the Iceland GDP Annual Growth Rate is projected to trend around 2.60 percent in 2020, according to our econometric models.