Financial and Mortgage Portfolio Overview
Investment growth loses pace after a growth spurt
Residential investment to take over from business investment as the driver of growth
Executives' expectations and business investment
Index value (left) and % change year-on-year (right)
Highlights
Investment, real change, and contribution of subcomponents
%
After a two-year contraction, investment
spiked in 2021, with growth measuring
just under 14%, its fastest pace in five
years
25
Business investment growth was
200
180
extremely strong, and public investment
20
also grew handsomely, while residential
investment shrank by over 4%
The outlook is for relatively robust growth
in business investment in 2022.
Residential investment will also pick up
again and public sector investment looks
sett to increase moderately
15
10
7.2
In 2023, residential investment will likely
be the sole driver of growth, as business
investment looks set to contract because
of rising interest rates and bleaker
expectations about firms' operating
5
160
13.6
140
120
100
2.6
0.5
80
0
environment
60
2024 will probably see moderate growth
in private sector investment coupled with
-5
a contraction in public investment
ISB Research forecasts that total
40
20
-10
investment will grow by over 7% in 2022,
less than 1% in 2023, and nearly 3% in
2024
-9.5
0
-15
The investment-to-GDP ratio will
therefore taper off gradually, although
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
investment will be relatively strong in
historical context
Public sector
Residential
Business
-Total investment
0
0.5
0.4
0.3
0.2
0.1
-0.1
-0.2
-0.3
-0.4
-0.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
-Corporate executives, 6M expectations
-Business investment, YoY change, 4Q moving average (r.axis)
Source: Statistics Iceland, Gallup.
42
August-September 2022View entire presentation