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Doom Wow Air is pushing Icelandic economy in recession

c27753e239ec4a6fb339d8dfbd608523 - Doom Wow Air is pushing Icelandic economy in recession

The Icelandic economy will not this year with 1.8 per cent growth in February was still provided, but with a 0.4 percent shrinkage. That has the central bank of Iceland said Wednesday. The adjustment is to a large extent the result of the bankruptcy of the low-cost airline, Wow Air in march.

Tourism grew over the years to become the major source of income for Iceland. It helped the island out of the valley to climb out of the financial crisis that more than ten years ago was undergoing.

The growth was due in part to the airlines Icelandair and Wow Air. That the latter end of march, its flights had to stop, meant a major blow to tourism, and by extension for the Icelandic economy in its entirety. In addition, it also plays a disastrous fishing season a role in the updated forecast.

The central bank lowered on Wednesday, moreover, the main interest rate by 0.5 percentage point, to 4 percent.

Like other European airlines had Wow Air, the difficult by the fluctuating fuel prices and overcapacity in the sector. It was with several potential investors spoken, but each time without result. Also a possible takeover by the Icelandic rival Icelandair became do not around.