The current account surplus was ISK 16.3bn in Q2 and GDP increased by 3.4% YoY in Q2. Statistics Iceland revised GDP growth in 2016 upwards from 7.2% to 7.4%.

The CPI based on August prices increased by 0.25% MoM bringing the headline number to 1.7%. The surplus of trade in services was ISK 60.5 bn in Q2, bringing the total surplus of trade in goods and services to ISK 14.7 bn. The Central Bank’s Chief Economist’s recent presentation on the financial crisis and the recovery in Iceland is now available.

Statistics Iceland is set to publish the consumer price index for August on Wednesday. We expect the CPI to increase by 0.6% MoM.

The exchange rate of the Icelandic króna (ISK) has been quite unstable in the past 2 months or so. The ISK has depreciated against major trading partner currencies since early June when the euro temporarily dipped below ISK 110 and the USD below ISK 100.

We expect that the MPC will decide to keep policy rates unchanged at its meeting on Wednesday. Earnings season is underway with 11 companies on the stock exchange reporting. Arion Bank is also set to report this week.