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Wow Air’s collapse has seriously affected Iceland’s economy

The Icelandic budget airline Wow Air abruptly shut down in March, leaving passengers stranded around the world — and now it appears the airline’s demise may have tanked Iceland’s economy. Wow Air’s bankruptcy has had such a negative effect on Iceland’s tourism sector that the country’s economy, which was previously estimated to grow by 1.8%, is instead on track to contract by 0.4%. The Icelandic central bank, which released those figures on Wednesday, said the “deterioration in the economic outlook has caused the inflation outlook to change markedly in a short period of time.” The country’s unemployment rate is now expected to hit 3.9% in 2019, the bank revealed, and Bloomberg reports that the Icelandic krona’s value has declined by 3.7% so far this year. More than 2 million people visited the country last year, and during the height of Iceland’s traveller boom in 2015, the tourism sector made up one-third of the country’s economy. - Vox -

 

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