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2016-10-18

Iceland Leading Indicator – Tourism a driving force

urism a driving force

REYKJAVIK, Iceland, 2016-10-18 10:00 CEST (GLOBE NEWSWIRE) --
The Analytica Composite Leading Indicator (CLI) for Iceland rose in September
for the second consecutive month. However, there were some downward revisions
for previous months. The CLI still indicates growth above long term trend.

Four of the six components rise on the previous month, i.e. tourist arrivals,
the Gallup Index of Consumer Confidence, the value of fish catches and the MSCI
World stock index. The remaining components contract. All the components are
adjusted for seasonality and long term trend. The largest impact is due to
tourist arrivals and increased fish catches. There is still strong growth in
tourism on the year. An upward revision is made in the long term trend estimate
of most CLI components. The main risk factors continue to include some external
factors mainly in relation to the geopolitical situation and growth prospects
for emerging markets and China.

Turning points of the CLI tend to precede turning points in economic activity
relative to trend by approximately six months. Economic activity is measured by
Gross Domestic Product (GDP) published by the Statistical Bureau of Iceland.
The calculation of Analytica’s CLI is based on methodology adopted by the OECD.

There are six components of Analytica’s CLI. These are: Fish catches, inflation
adjusted debit card turnover, number of tourists visiting Iceland, the MSCI
World equities index, inflation adjusted imports and the Gallup Index of
Consumer Confidence. For September four of the six underlying components are
strengthening year on year. Also, four of the six components rise on the
previous month.

Table 1 shows the development of the CLI during the past twelve months. The
value for September rises by 0.2 per cent to 101.8. This value serves as an
indicator to economic activity six months into the future, i.e. March 2017. A
value of 100 indicates GDP in line with its long term trend.

Table 1. Analytica's CLI 2015-2016

Change in % Indication
----------------
Index on month YOY for month
2015
September 101.1 0.2% 2.1% March 2016
October 101.3 0.2% 2.2% April
November 101.6 0.3% 2.3% May
December 101.8 0.3% 2.3% June
2016
January 102.0 0.2% 2.3% July
February 102.1 0.1% 2.2% August
March 102.1 -0.1% 2.1% Sept.
April 101.9 -0.1% 2.0% Oct.
May 101.8 -0.2% 1.8% Nov.
June 101.6 -0.1% 1.4% Dec.
July 101.5 -0.1% 1.0% Jan. 2017
August 101.6 0.1% 0.7% Feb.
September 101.8 0.2% 0.6% March

The October Composite Leading Indicator is scheduled for release on November
17, 2016.

Further information is provided by Analytica’s CEO, Mr. Yngvi Hardarson
Tel. +354 5278890 - email: yngvi@analytica.is

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