I have been hearing a lot about how the Icelandic economy is showing signs of GDP growth and the new projections of the Central Bank of Iceland and the Government of Iceland are based on that growth projection. I have written about what I think about projections and forecasts… bottom line I DONT BUY IT. Lets look at the number of new companies registered in Iceland vs the number of companies filing for insolvency. If you look at the trend since 2008, the number of insolvencies have been rising dramatically and the number of new companies being formed has been dropping dramatically this is a double whammy. I wonder where is this growth that everyone is talking about is coming from? It could be the existing companies are growing but where? the fishing industry cannot grow because of the quotas, the energy industry cannot grow because there have been no capital investment in any manufacturing industry, tourism is probably the only industry that is growing. I am not sure what is the path forward? which sectors should Iceland focus on growing? I think I know where resources should be devoted, but then again is that where the resources are being devoted? I don’t think it is quite clear looking at the data. I am almost certain that all the new startup companies that have started in the last couple of years are going to suffocate without new investment and capital.
If you are interested in the data you can find it here, the source of the data is Statistics Iceland it is an excellent resource if you have not used it already.

Enhanced by Zemanta