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Iceland Mag

Economy

Disposable incomes of Icelandic households increased by 10.2% in 2016

By Staff

  • Growth can cause disruption Hotel construction in downtown Reykjavík is one part of the story of economic recovery. Photo/Anton Brink.

Thanks to strong economic growth and low inflation per capita real purchasing power increased by 6.9% in 2016, new figures from Statistics Iceland reveal. The disposable income of the household sector increased by 10.2% from 2015, while per capita income increased by 8.7%. 

Purchasing power
 
Purchasing power

Recovering from the crash Icelanders are well on their way to make up for the effects of the 2008 financial crash. Photo/Statistics Iceland

Disposable income is calculated as sum of compensation of employees, property income, surplus from sole proprietorships and transfer payments received. Statistics Iceland reports that households’ total income increased by 11.1% from the previous year. Thereof, total compensation of employees increased by 11.6%, property income by 16.8%, operating surplus from sole proprietorship by 10.4% and current transfers received increased by 7.4%.

Read more: Icelandic economy continues to boom: GDP expected to grow by by 6% in 2017

Per capita real purchasing power dropped by 14.4% in 2009, and an additional 13.4% in 2010. Purchasing power did not pick up again until 2013. In 2011 it saw a small increase of 3.5%, then rising by 0.6% in 2012 and dropping 0.8% in 2013. In the last three years, however, purchasing power has been steadily increasing. Per capita purchasing power has yet to reach its 2008 peak. 

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