Published on : Tuesday, June 25, 2019
Last year, Iceland was named the world’s second-worst country with regard to ‘overtourism’, based on the number of visitors for every local.
But the latest numbers look dismal. Visitor numbers plunged 24 per cent in May compared to the same period last year and the significant summer season is looking unstable. The central bank last month pulled the emergency lever to moderate the blow and delivered a half a point rate cut, while the government has pledged to boost stimulus, if needed.
“We are prepared for the possibility of a deeper recession, and the numbers we are getting on tourist arrivals seem to indicate that that may happen,” central bank Governor Mar Gudmundsson said in an interview in Dubrovnik.
After 20 quarters of continuous growth, Iceland is bracing itself for a sharp decline. Forecasts for 2019 vary widely, with a slump as deep as 1.9 per cent, but there’s a general consensus that the nation is facing its worst downturn since the financial crisis.
Unemployment in Iceland has gone up to 3.6 per cent. It was below 3 per cent at the start of the year.
For this year, the number of visitors could drop 17 per cent, according to forecasts from the Keflavik Airport’s operator. Hotel owners are already feeling the pinch, with overnight stays falling.
Tags: Iceland