Iceland’s Fish Bonanza Means Boost to Growth Outlook

(Bloomberg) -- Iceland’s prospects of enjoying the biggest catch of capelin fish in two decades has prompted Islandsbanki HF to raise its growth outlook for the economy in 2022. 

Jon Bjarki Bentsson, the lender’s chief economist, said in a report on Tuesday that export earnings of the North Atlantic species might turn out as high as 70 billion kronur ($546 million) in the coming season, or at least triple this year’s tally. He raised his growth forecast for 2022 to 4.4%, from 3.6%. 

The improved outlook illustrates the backdrop for the island nation’s central bank, which will probably raise its interest rate on Wednesday to keep inflation and house prices in check after this year becoming the first monetary authority in the advanced world to do so since the pandemic struck.  

Capelin are small fish often consumed as a delicacy with a taste resembling herring, or else mixed with wasabi. Alternatively they are used for animal feed. Iceland’s Marine and Freshwater Research Institute last week released advice suggesting an impending catch of more than seven times the size of the past season’s tally. 

“We foresee considerably more export earnings and growth next year than previously expected,” Finance Minister Bjarni Benediktsson told local paper Mbl on Friday. “The likelihood has increased that we can grow faster out of the covid crisis.”

©2021 Bloomberg L.P.