Iceland's economy has stabilized further and measures to ensure a restructuring of debt on the crisis-hit island remain vital, the International Monetary Fund (IMF) said on Sunday.
The top three Icelandic banks collapsed in October 2008 and the country needed a bailout led by the IMF.
"Iceland's post-crisis stabilization is continuing, supported by a steady implementation of program policies," the Fund said in a statement after the end of talks on a review of economic measures that accompanied the bailout.
Fund mission chief Julie Kozack said while broad agreement had been reached on policy measures that could deliver the goals set in the bailout, more time was needed to assess measures under consideration to restructure household debts.
She said an acceleration of corporate and household debt restructuring in an affordable way was vital to the recovery and sustainable growth.
The IMF was referring to measures being considered by the government to bring relief to indebted homeowners who have suffered during the downturn. The plight of the omeowners and fears of widescale evictions sparked two demonstrations against the authorities in October.
The IMF said discussions with Iceland would continue in the next few weeks, aiming to bring the review to the executive board for approval in late 2010 or early 2011.
It said inflation was slowing and the trade balance was in surplus. Economic growth was expected to pick up steam in 2011, but would be slower than previously projected due to delays in investment projects.
Share
