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The Icelandic economy left formally of the recession in the third quarter of this year to grow 1.2%, ending a series of seven consecutive quarters of falling GDP, according to official statistics released Tuesday.
After falling for seven consecutive quarters of quarter 2008 to second in 2010, the Gross Domestic Product (GDP) in Iceland rose 1.2 in July-October period, compared with the previous quarter, said the National Bureau Statistics in a statement. Compared
annual Iceland's economy shrank 1.6%, according to figures released by the office.
"The growth is mainly due to household consumption, which fell after the collapse of banks in 2008, "said Fridrik Mar Baldursson, a professor of economics at Reykjavik University.
Although the increased household consumption (+3.8% over the previous quarter) and exports (+0.8%) and imports (+6.8%), investments fell sharply (-5.6%), and public spending (-0.6%).
The Icelandic banking system, hypertrophied, collapsed in October 2008 driven by the global financial crisis, prompting the intervention of the International Monetary Fund (IMF) and a deep crisis in a country hitherto booming economy.
However, according to the IMF and economists recession was less brutal than initially expected.
"The recession in Iceland has been lower than expected, and has not been worse than in other less affected countries," stressed the IMF in its latest economic report on the island, published in October.
The Icelandic krona, which lost nearly half its value has stabilized "at a competitive level" favorable to exports, according to the IMF.
Iceland also is financed in the markets at more favorable rates, indicating that there is greater confidence. Economists point out that the country made a good decision to let banks collapse, instead of injecting public funds to pay off their debts, as did Ireland.
After a recession of 6.8% in 2009, Icelandic GDP expected to contract 3% this year, before growing by 1.9% in 2011, according to forecasts by the national statistics office.
The Icelandic economy left formally of the recession in the third quarter of this year to grow 1.2%, ending a series of seven consecutive quarters of falling GDP, according to official statistics released Tuesday.
After falling for seven consecutive quarters of quarter 2008 to second in 2010, the Gross Domestic Product (GDP) in Iceland rose 1.2 in July-October period, compared with the previous quarter, said the National Bureau Statistics in a statement. Compared
annual Iceland's economy shrank 1.6%, according to figures released by the office.
"The growth is mainly due to household consumption, which fell after the collapse of banks in 2008, "said Fridrik Mar Baldursson, a professor of economics at Reykjavik University.
Although the increased household consumption (+3.8% over the previous quarter) and exports (+0.8%) and imports (+6.8%), investments fell sharply (-5.6%), and public spending (-0.6%).
The Icelandic banking system, hypertrophied, collapsed in October 2008 driven by the global financial crisis, prompting the intervention of the International Monetary Fund (IMF) and a deep crisis in a country hitherto booming economy.
However, according to the IMF and economists recession was less brutal than initially expected.
"The recession in Iceland has been lower than expected, and has not been worse than in other less affected countries," stressed the IMF in its latest economic report on the island, published in October.
The Icelandic krona, which lost nearly half its value has stabilized "at a competitive level" favorable to exports, according to the IMF.
Iceland also is financed in the markets at more favorable rates, indicating that there is greater confidence. Economists point out that the country made a good decision to let banks collapse, instead of injecting public funds to pay off their debts, as did Ireland.
After a recession of 6.8% in 2009, Icelandic GDP expected to contract 3% this year, before growing by 1.9% in 2011, according to forecasts by the national statistics office.
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