Pre-accession economic programme 2009-2011. Iceland

Abstract

The Pre-Accession Economic Programme (PEP) is prepared on the basis of the government's medium-term fiscal programme, the20/20 strategy adopted by the government in January 2011 and policy commitments related to Iceland's cooperation with the International Monetary Fund (IMF). The PEP is prepared by the Ministry of Economic Affairs with contributions from relevant ministries and institutions.The main objective of the government's economic policy in the near-term is to lay the foundation for a sustainable economic recovery following the collapse of the banking sector in October 2008. Inflation has subsided quickly as the exchange rate has stabilized thus allowing for extensive interest rate cuts from March 2009. Preliminary national account data suggests that growth has resumed in the third quarter of 2010, thus ending the longest and deepest recession since Iceland's independence.