Iceland poised to cut rates again to help economy

26 June, 2019 12:00 AM printer

REYKJAVIK: Iceland is leading the way in interest rate cuts as the tiny North Atlantic island seeks to head off a recession amid a slump in its tourism industry.

Analysts anticipate a cut of at least a quarter point on Wednesday, followed by several more later this year. Iceland in May became the first country in western Europe to cut rates, lowering its benchmark by 50 basis points, to 4 per cent, report agencies.

The country is struggling in the wake of the collapse of Wow Air, which has choked off tourism arrivals. That, coupled with a failed capelin fishing season, is threatening to plunge Iceland into the worst recession since its economic collapse a decade ago.