Executive Summary
Assessment and Recommendations
Chapter 1. Policy Challenges in Sustaining Improved Economic Performance
-Trend Growth Has Steepened...
-...But Growth Has Been Volatile and Accompanied by Imbalances and Tensions
-Near-Term Economic Prospects Are Surrounded by a Number of Risks...
-...And Decisions about Further Large-Scale Investments Will Be Crucial to the Medium-Term Outlook
-Macroeconomic Policy Could Help Sustain Healthy Growth
-Financial Market Liberalisation Has Boosted Growth and Needs to Continue
-Human Capital Development is Crucial to Maintaining a High Relative Standard of Living
-Other Policy Areas Also Need Continued Attention
Chapter 2. Improving the Implementation of Monetary Policy
-Inflation Has Exceeded its Target
-Higher Policy Rates have Not Been Reflected in Real Lending Rates
-Inflation Is Expected to Remain Excessive...
-...Which May Require Strengthening of Central Bank Accountability
-Other Reasons for Strengthening Credibility
-The Current Stance of Policy
-Concluding Remarks
Chapter 3. Improving Fiscal Management
-A Sound, Long-Term Fiscal Position
-Continued Expenditure Slippage
-Demand Management
-Local Government Finances
-Concluding Remarks
Chapter 4. Building on the Success of Financial Liberalisation
-Financial Development
-Housing
-Indexation
-Financing Innovation
-Concluding Remarks
Chapter 5. Adapting the Education System to a Changing Environment
-The Changing Structure of the Economy Requires Adjustments in the Area of Human Resources
-Expenditure on Education Has Been Raised Considerably
-Outcomes Have Improved but Could Be Better
-Reforms at the Primary and Secondary Level
-The Transformation of Higher Education
-Concluding Remarks
-Annex 5.A1. PISA Results for Iceland