Financial News: Iceland GDP Shrinks 0.6% In Q4

Iceland GDP Shrinks 0.6% In Q4

02/27/2026 - 09:23:00 (RTTNews)

(RTTNews) - Iceland's economy contracted in the fourth quarter after expanding sharply in the third quarter, data from Statistics Iceland showed on Friday.

Gross domestic product dropped 0.6 percent sequentially in the fourth quarter, reversing a 3.2 percent growth in the previous three-month period, which was the quickest expansion since the third quarter of 2023.

The expenditure breakdown showed that gross fixed capital formation declined markedly by 12.5 percent, and net external demand was not favorable as exports fell 5.0 percent, which was faster than the 4.2 percent decline in imports.

On a positive note, private final consumption grew 5.5 percent, and government consumption was 1.1 percent higher.

On a quarterly basis, GDP declined a seasonally adjusted 0.8 percent in the final quarter of 2025.

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