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Iceland GDP Q1 2010


In real terms, seasonally adjusted GDP in the 1st quarter of 2010 increased by 0.6% from the previous quarter. Over the same period total domestic expenditure increased by 1.3%. Household final consumption decreased by 0.6% and government final consumption by 0.5%. Gross fixed capital formation decreased by 15.6%, mainly due to one-off investment in ships and aircraft on the 4th quarter of 2009. Exports fell by 3.6% and imports by 3.3% in the 1st quarter of 2010 as compared with the 4th quarter 2009.” Statistics Iceland

GDP and Gross domestic expenditure

4-period moving average changes, [ ( Periods 2 to 5 / Periods 1 to 4 ) / Periods 1 to 4 ], we see an increase of the GDP from -1.1% Q4 2009 to +1.7% Q1 2010 (observe that this indicator measures Q2 2009 to Q1 2010 against Q1 to Q4 2009). Seasonally adjusted, the same indicator moves from -0.5% to +1.8%. Q1 1998, GDP measured 130.4 billion and has more than doubled since then to reach 378.2 billion Q1 2010 (seasonally adjusted figures are 138.4 to 397.9 billion).

Gross domestic expenditure has increased considerably since Q3 2009 and has risen from -4.3% to +1.6%. In seasonally adjusted terms, the change is -4.3% to +1.5%. Q1 1998, Gross domestic expenditure measured 142.9 billion and stands at 351.3 billion Q1 2010 (seasonally adjusted figures are 148.3 to 361.7 billion). Q1 1998, Gross domestic expenditure was 109.6% to GDP; Q1 2010 it is 92.9%. The correlation between the GDP and Gross domestic expenditure is 96.2% (96.1% seasonally adjusted).

Private and government final consumption

Private final consumption drops from 206.6 to 198.4 billion Q4 2009 to Q1 2010, yet the 4-period average change indicator only moved down by a notch or from 2.4% to 2.2%. There is a prominent nosedive from Q1 2008 to Q4 2009 where the indicator dips sharply down to reach a bottom at -2.0%. In seasonally adjusted terms, private final consumption increases from 201.2 billion Q4 2009 to 204.2 Q1 2010 with the 4-period average change indicator changing from 2.3% to 2.2%. Private final consumption measured 59.2% to GDP Q1 1998 and currently stands at 52.4%. Correlation to GDP is 97.6%.

Government final consumption measures 97.1 billion Q1 2010 with the 4-period indicator dropping from 5.6% Q4 2008 to 0.1%. In seasonally adjusted terms, government final consumption stands at 97.5 billion and the 4-period change indicator at 0.1%. Government final consumption measured 24.3% to GDP Q1 1998 and currently stands at 52.4%. Correlation to GDP is 99.2%.

Gross fixed capital formation and Business sector investment

Gross fixed capital formation is reduced from 59.6 to 45.3 billion between quarters, yet the 4-period average change indicator leaps up from -14.3% to +2.6%. In seasonally adjusted terms, gross fixed capital formation stands at 49.4 billion with a 4-period average change of 1.7%. Gross fixed capital formation measured 25.8% to GDP Q1 1998 and currently stands at 12.0%. Correlation to GDP is 71.3%.

Business sector investment drops from 41.2 to 31.3 billion between quarters, yet the 4-period average change indicator leaps up from -13.4% to +11.5%. Record height was reached Q33 2005 where the 4-period average change indicator reached 15.6% with business sector investment of 57.3 billion. Business sector investment measured 17.8% to GDP Q1 1998 and currently stands at 8.3%. Correlation to GDP is 61.8%.

Residential construction and Government services

Residential construction continues downward from 6.8 to 6.6 billion between quarters. The 4-period average change indicator rises from -24.9% to -13.2% which shows the terrible state of Icelandic the construction sector with resulting drop in real estate prices. In seasonally adjusted terms, the quarterly change is from 5.7 to 7.5 billion with the 4-period average change indicator rising from -23.1% to -14.8%. Residential construction measured 3.8% to GDP Q1 1998 and currently stands at 1.7%. Correlation to GDP is 69.3%.

Government services are being severely cut down as can be seen by comparing the cyclical pattern. Between Q3 2007 and 2008, this item increased from 17.4 to 21.4 billion. Q3 2009 saw it drop to 20.2 billion. The 4-period average change indicator measured 7.7% Q3 2007, 6.8% 2008, and -2.1% 2009. Comparing 1Q 2009 and 2010 yields a change from 10.1 to 7.4 billion with the 4-period average change indicator moving from -4.2% to -5.0%. In seasonally adjusted terms, the quarterly change is from 12.1 to 10.7 billion with the 4-period average change indicator rising from -7.7% to -7.3%. Government services measured 4.1% to GDP Q1 1998 and currently stand at 2.0%. Correlation to GDP is 77.9%.

Balance of Trade

The collapse of the ISK has had a positive impact on the Balance of Trade. We need to go all the way back to Q1 2003 to see similar figures, yet they pale in comparison to the results beginning Q4 2008 and extending to the present. The historical peak (since Q1 1998) occurred Q4 2001 and totaled 7.9 billion. The same quarter 2008 measured 28.3 billion and Q1 2010 is at 26.9 billion. Seasonally adjusted, it amounts to a trade surplus of 36.3 billion.

Exports drop between quarters from 205.0 to 196.6 billion yet the 4-period average change indicator moves from 1.6% to 3.8%. Seasonally adjusted, this amounts to a change from 212.4 to 217.7 billion and 3.2% to 4.1%. The export generating power is increasing. Exports measured 31.8% to GDP Q1 1998 and currently stand at 52.0%. Correlation to GDP is 92.1%.

Imports drop between quarters from 176.6 to 169.7 billion yet the 4-period average change indicator moves from 1.9% to 4.0%. Seasonally adjusted, this amounts to a change from 172.5 to 181.5 billion and 2.1% to 3.9%. The consumer market may be showing signs of recovery. Imports measured 41.3% to GDP Q1 1998 and currently stand at 44.9%. Correlation to GDP is 96.8%.

Exported goods are increasing while imported goods drop slightly. The 4-period average change indicator measures 4.1% for exports and 3.8% for imports. Seasonally adjusted, this amounts to 3.3% and 3.8% respectively. Exported goods measured 22.1% to GDP Q1 1998 and currently stand at 36.0%. Correlation to GDP is 90.7%. Imported goods measured 30.3% to GDP Q1 1998 and currently stand at 27.7%. Correlation to GDP is 96.8%.

Exported services show a sudden decrease while imported services notch slightly upward. The 4-period average change indicator measures 3.2% for exports and 4.2% for imports. Seasonally adjusted, this amounts to 5.5% and 4.1% respectively. Exported services measured 9.7% to GDP Q1 1998 and currently stand at 16.0%. Correlation to GDP is 85.5%. Imported services measured 11.1% to GDP Q1 1998 and currently stand at 17.2%. Correlation to GDP is 97.7%.

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