Rising Pessimism Among Icelandic Managers: New Survey Unveils Economic Concerns
A recent survey conducted by Maskina for the Industry Association (SI) reveals a significant shift in the outlook of Icelandic managers regarding the economy.
In May, a reassuring 56% expressed optimism, anticipating economic growth within the next year. That figure has since plummeted to just 26%. Concurrently, the proportion of executives bracing for a recession has surged from 18% to an alarming 46%.
Ingólfur Bender, chief economist at SI, attributes this growing pessimism to disruptions in export sectors. He points to ongoing challenges faced by energy-intensive industries, the bankruptcy of Play, a downturn in tourism, and a decline in the fishing sector as key factors behind this bleak outlook.
Bender emphasizes the critical link between management expectations, investments, and employment levels, urging the government to take prompt action. “The next interest rate decision is scheduled for Wednesday, followed by another in February. Waiting until then to ease monetary constraints would be excessively prolonged,” he cautions.
He further suggests that a revision of mortgage regulations could alleviate financial pressures. Many individuals are currently caught in the rental market, expending a disproportionate amount of their disposable income on rent.
While Bender welcomes the proposed employment policy aimed at enhancing productivity and innovation, he insists that immediate measures are essential to address the deteriorating economic landscape, noting that a reduction in monetary control could provide the most rapid relief.
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