Iceland Leading Indicator - Debit card turnover and fish catches drive April rise

REYKJAVIK, Iceland, May 17, 2016 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland continued its rise in April, now by 0.1 percent on the month, following a revised 0.1 percent rise in March. The value of the indicator in upswing has not been higher since 2006. The CLI indicates growth above long term trend.

The April rise can be attributed to a rise in debit card turnover, growth in imports, increased fish catches and improved consumer confidence. The main risk factors to the still positive outlook 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 April five of the six underlying components are strengthening year on year. However, 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 April rises by 0.1 percent on the month to 102.8. This value serves as an indicator to economic activity six months into the future, i.e. October 2016. A value of 100 indicates GDP in line with its long term trend.

The May Composite Leading Indicator is scheduled for release on June 20, 2016.