Tuesday, October 28, 2008
CHILLY NEWS FROM ICELAND
Iceland's central bank lifted the key interest rate to 18 percent from 12 percent after Icelandic krona lost 70 percent during this crisis (link). Secondly, Iceland's GDP is expected to contract by up to 10 percent, unemployment is expected to reach 8 percent or higher while inflation rate could hit as much as 20 percent. In fact, IMF recently predicted the rise in the inflation rate to 11,2 percent. Here (link) is a brief outline of Iceland's state of the economy, analyzing the macroeconomic background of country's current crisis as well as rapid expansion in the latter decade.