5 February 2024
The week ahead
- Wednesday is an interest rate decision date at the Central Bank of Iceland (CBI) and sees the publication of Peningamál. We forecast unchanged rates. Arion Bank, Festi and Marel publish results.
- On Thursday, Íslandsbanki, Sjóvá, SKEL fjárfestingarfélag and Play publish results.
- On Friday, the Icelandic Tourist Board releases departures from Leifsstöð International Airport and the Directorate of Labour publishes registered unemployment.
Image of the week
Inflation has decreased in recent months and, in addition, fewer components have increased by over 10% in the past 12 months. Over 30% of components had increased by over 10% in the past 12 months in November 2023 and only 18% now in January.
Highlights of the previous week
- The Consumer Price Index fell by 0.16% between months in January, bringing 12M inflation down from 7.7% to 6.7% - it peaked at 10.2% in July of 2023. Air fares from Iceland decreased unexpectedly between months and new car prices increased much less than expected while other components changed more or less in line with expectations. We expect inflation to continue to decrease in the next months, to 6.1% in February, 6.3% in March and 5.1% in April. Dwindling inflation in the next three months is mainly a result of the significant increase that occurred between months in February through to April 2023; months that disappear from 12M inflation figures in coming months.
- The CBI published the results of its market expectations survey carried out 22-24 January before Statistics Iceland released inflation figures for January. There was no change to market expectations for inflation in the first half of 2024 as compared with the November survey, with the median response unchanged at 6.9% for the first quarter and 6.0% for the second quarter. Instead of 5.0% inflation in the fourth quarter of 2024, the market now expects 5.5% inflation. Many more respondents than in November now consider the monetary policy stance to tight and most expect the first policy rate cut in the second quarter.
- The Icelandic Tourist Board published its summary for 2023.
- Landsbankinn and Icelandair (IR presentation) published annual financial statements for 2023, Eik published internal accounts and Alvotech announced positive results of pharmacokinetic testing of AVT03.
- ÍL-sjóður offered switches.
Statistics and market data
Disclaimer
This review and/or summary is marketing material intended for information purposes and not for business purposes. This marketing material does not contain investment advice or independent investment analysis. The legal provisions that apply to financial advice and financial analysis do not apply to this content, including the ban on transactions prior to publication.Information about the prices of domestic shares, bonds and/or indices is source from Nasdaq Iceland - the Stock Exchange. Landsbankinn’s website contains further information under each individual equity, bond class or index. Information about the prices of non-domestic financial instruments, indices and/or funds are sourced from parties Landsbankinn considers reliable. Past returns are not an indication of future returns.Information about the past returns of Landsbréf funds is based on information from Landsbréf. Detailed information about the historic performance of individual funds is available on Landsbankinn’s website, including on returns for the past 5 years. Information about the past performance of funds show nominal returns, unless otherwise stated. If results are based on foreign currencies, returns may increase or decrease as a result of currency fluctuations. Past returns are not necessarily an indication of future returns.Securities transactions involve risk and readers are encouraged to familiarise themselves with the Risk Description for Trading in Financial Instruments and Landsbankinn’s Conflict of Interest Policy, available on Landsbankinn’s website. Landsbankinn is licensed to operate as a commercial bank in accordance with Act No. 161/2002, on Financial Undertakings, and is subject to supervision by the Financial Supervisory Authority of the Central Bank of Iceland (https://www.cb.is/financial-supervision/)You may also be interested in
3 Dec. 2024
Monthly newsletter where Economic Research analysis new statistics, reviews current economic affairs and provides an outlook.
6 Nov. 2024
Monthly newsletter where Economic Research analysis new statistics, reviews current economic affairs and provides an outlook.
21 Oct. 2024
Last week, we published an economic forecast to the year 2027. The housing price and rental price indexes decreased more between months in September and household payment card turnover contracted between years domestically while rising abroad. The Central Bank of Iceland (CBI) published the minutes of the Monetary Policy Committee (MPC) meeting, which shows that all Committee members agreed to lower the policy rate. Several companies publish financial results this week.
15 Oct. 2024
Landsbankinn Economic Research forecasts a status quo in the economy between years and a 0.1% contraction in GDP. Setbacks affected the export sector in the first half of the year, with capelin catch failure and slower growth in the travel sector causing a contraction. This has been compounded by the cooling impact of high interest rates on demand, which nevertheless remains strong.
14 Oct. 2024
Tomorrow morning, Landsbankinn Economic Research presents a new economic forecast to the year 2027 at a morning meeting in Harpa. This week, the Housing and Construction Authority (HMS) publishes the housing price index, the rental price index and its monthly housing market report. On Wednesday, the Central Bank of Iceland (CBI) releases the minutes of the Monetary Policy Committee’s last meeting. Last week’s highlight was that traveller numbers to Iceland are slightly up between years in September and there is a small uptick in unemployment.
7 Oct. 2024
The Monetary Policy Committee (MPC) of the Central Bank of Iceland (CBI) lowered the policy rate last week, for the first time in four years. The CBI’s key interest rate is now 9% after having stood unchanged at 9.25% for over a year. Inflation in the eurozone remains on a downward trajectory, measuring 1.8% in September, below the 2% inflation target. Inflation figures for the US will be published this week.
30 Sept. 2024
Inflation was slightly lower than expected in September, down from 6.0% to 5.4%. We nevertheless expect that the Monetary Policy Committee (MPC) will wish to proceed with caution when it meets early this week and that it will keep the policy rate unchanged on Wednesday.
23 Sept. 2024
This week, the Central Bank of Iceland (CBI) releases a statement from the Financial Stability Committee and a report on financial stability. Statistics Iceland publishes inflation figures for September on Friday. Last week, the Housing and Construction Authority (HMS) published the housing price index, which rose sharply between months, and the rental price index, which was down between months. Data on payment card turnover, published by the CBI last week, indicates that there is still considerable domestic demand for goods and services.
16 Sept. 2024
This week will see the publication of the housing price index, the rental price index and payment card turnover figures for August. Last week we learned that tourist arrivals in August of this year were similar to the same month in 2023. Unemployment increased slightly between months in August. The fiscal budget for 2025 was presented.
9 Sept. 2024
This week’s highlights are the publication of August tourist figures and registered unemployment, both set for release tomorrow. Last week, the minutes of the last rate decision meeting of the Monetary Policy Committee (MPC) were published. The MPC was unanimous in its decision to keep the policy rate unchanged, unlike the previous three meetings, at which one Committee member voted to lower rates by 0.25 percentage points.