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Icelandic economy suffers from declining tourism

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Tourists swim in the warm Hveragerdi River, Iceland, in June 2017. JOE RAEDLE / AFP

It is both the luck and the curse of small economies. When all is well, good news on the front of the industrial activity is enough to make jump immediately the gross domestic product (GDP) of a few tenths of points. Conversely, the move of a single company is likely to drag the entire country into turmoil â € "even in the recession. Such is the dark scenario that Iceland is going through today. And, more precisely, since the airline company Wow Air, success story postcrisis years, went bankrupt on March 28th.

According to figures released on Thursday August 8th by the Icelandic statistical institute, the unemployment rate stood at 4.4% in the second quarter. It is a little compared to the EU average (6.3%), but it is 1.4 points more than the level recorded in the first three months of the year. © e year. And for good reason: since Wow Air has slammed the door, victim of competition from other low-cost airlines and rising fuel prices, the number of visitors to the island has dropped, penalizing the job.

In the second quarter, arrivals at Keflavik airport, near the capital Reykjavik, plunged 20% year-on-year. The number of nights dropped by 10% on average, and even 29% for those booked on the Airbnb platform (â € "29%).

A hard blow for tourism, essential pillar of the economy. After the collapse of the banking system, in 2008, it pulled the resumption of the activity and allowed the country to recover quickly from the biggest financial crisis of its history. Since 2011, when the eruption of the Eyjafjallajökull volcano put the island and its wilderness in the spotlight, the number of visitors has steadily increased: 459,252 in 2010, 969,181 in 2014, 2.3 million in 2018â € | That's nearly seven times more than the local population, of 330,000 inhabitants!

As a result, tourism, whose economic weight was once anecdotal, now weighs close to 20% of GDP and more than a third of the contribution of foreign currencies , in front of the fishing and the production of aluminum. Many Icelanders rushed into the breach, improvising guides, or renting their real estate on Airbnb â € "making the housing prices in the capital soar.