Icelandic economy contracts in second quarter

Gross domestic product contracted in the second quarter, although growth over the first half of the year remains positive because of the strong increase in GDP in the first quarter. This is according to new calculations published today by Hagstofa Íslands (Statistics Iceland). The economy contracted by 1.1 percent in the second quarter, following growth of 3.8 percent in the first quarter. Taken together, economic growth over the first half of the year was therefore 1.3 percent. This is the third consecutive time that a quarter of contraction has followed a quarter of economic growth. Trade in goods with other countries was the main factor behind the contraction in the second quarter. A larger trade deficit than in the same period last year meant that foreign trade made a negative contribution of around 2.9 percentage points to economic growth. Hagstofa Íslands (Statistics Iceland) also calculates GDP adjusted for seasonal factors. On that basis, seasonally adjusted GDP contracted by 3.0 percent from the first quarter to the second quarter.