OECD Economic Outlook, Volume 2020 Issue 2
The COVID-19 pandemic will cast a long shadow over the world’s economies and the economic outlook is very uncertain. This issue of the OECD Economic Outlook analyses the impacts of COVID-19 on the economy and puts forward projections for output, employment, prices, fiscal and current account balances.
This issue includes a general assessment of the macroeconomic situation, a series of notes on the current policy challenges related to the COVID-19 pandemic and a chapter summarising developments and providing projections for each individual country. Coverage is provided for all OECD members as well as for selected partner economies.
Iceland
Output is set to contract by almost 8% in 2020, but is projected to expand by around 3% per annum in both 2021 and 2022, thanks to rising household consumption. Goods exports are expected to rise, although foreign tourism will take longer to gain momentum. Business investment will remain weak, but housing and public investment will pick up. Given the continued impact of the pandemic, especially on international travel, until a vaccine is deployed widely, activity will still fall short of its pre-crisis level at the end of 2022. Unemployment continues to rise and will exceed 7% in mid-2021, and wage growth will slow.
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