Economic Growth 2.6% in 2006

According to provisional data from Statistics Iceland, Icelandic Gross Domestic Product in 2006 was 1142 billion ISK (€ 12.85 bil). In real terms, GDP grew at a rate of 2.6%, down from 7.2% growth in the previous year. Last year's growth in GDP can mainly be explained by 4.6% growth in household final consumption and 13.0% growth in fixed capital formation. This was mainly offset by a growth in imports, which increased by 8.8% in real terms. At the same time exports declined by 5.6% with the consequences that the balance on current account became negative by 303 billion ISK, 26.5% of GDP. In 2005 the balance on current account was negative by 163 billion ISK, 16% of GDP. Regardless of some improvements in terms of trade, a considerable growth in net outflow of primary income led to a decline in Gross National Income (GNI) by 1.7% after 8.1% growth in the year before.