Iceland Is Getting Ready for a ‘Deeper Recession’

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Iceland is preparing for a deeper recession this year amid dropping tourism arrivals and a failed capelin season, central bank Governor Mar Gudmundsson said, Bloomberg News reported. “We are prepared for the possibility of a deeper recession, and the numbers we are getting on tourist arrivals seem to indicate that that may happen,” Gudmundsson said in an interview on the sidelines of a conference in Dubrovnik, Croatia. “There may be a fall in tourism numbers to the 2016 level and this may have a significant effect on households, but hopefully we’ll be out of this early next year.” The bankruptcy of budget airline Wow Air delivered a blow to the Icelandic economy, prompting the central bank to cut its main interest rate by half a point to 4% last month. At the time, the central bank also said the economy will probably contract 0.4% this year. Read more