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Iceland’s Economy Grew Annual 4.2% in Second Quarter on Exports

Sept. 6 (Bloomberg) -- Iceland’s economy grew in the second quarter, helped by a rise in exports and consumer spending, the nation’s statistic agency said.

Gross domestic product gained 4.2 percent, after growing a revised 0.3 percent in the first quarter, Reykjavik-based Statistics Iceland said in a statement today. Output declined 6.5 percent from the prior quarter, pulled down by “unusually large changes in inventories of fish.”

Iceland’s central bank last month kept its main interest rate unchanged for a sixth consecutive meeting after intervening in the currency market and predicted it will take longer to tame inflation. The bank forecast that the economy will expand 1.9 percent this year, raising a May forecast for 1.8 percent growth. Gross domestic product will rise 2.8 percent next year, according to the central bank.

Icelanders elected a new government in April, which pledged to boost economic growth through loan writedowns and tax cuts as the nation emerges from its 2008 banking meltdown.

Exports rose 1.8 percent from a year earlier, while imports fell 2.3 percent. Household spending rose 1.4 percent, the agency said. Gross fixed capital formation declined a 5.5 percent and government spending rose 0.9 percent.

To contact the reporter on this story: Saleha Mohsin in Oslo at smohsin2@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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