Economic Department

The Department deals with a variety of economic and fiscal policy issues, both for the Ministry and others.

Assessment of economic developments and prospects
The Department regularly surveys the economic situation and prospects, both in the short and medium term. It has taken over the operation and development of forecasting models previously performed by the National Economic Institute. The Department publishes its principal forecasts for the economy in October and April each year, partly in connection with the preparation of the fiscal budget. The forecasts are updated in December and June.

The Department deals with all main aspects of the economy, such as the current state and prospects of principal industries, household expenditure and income, public finances, both of the central and local governments, price and monetary developments, foreign trade, international developments, the impact of central government finances upon the economy, the structural fiscal balance as well as a number of other issues. Longer-term economic prospects are also assessed, both for the economy as a whole and for individual sectors affecting long-term prospects of the economy.

Fiscal revenue forecasts
The Department prepares the revenue forecast of the fiscal budget, including an assessment of the fiscal and economic impact of changes in taxation. The Department runs a number of simulation models of taxation and pension developments. This includes a comprehensive model of fiscal budget revenue, a model for personal and corporate taxation and one for the monthly estimates of fiscal revenue.

Economic studies
The Department engages in a number of ad hoc studies dealing with economic and fiscal issues, such as pension financing and social insurance, municipal finance issues, environmental matters, wage agreements and government measures related thereto. The staff participates in a number of government committees and working parties.

Information dissemination
The Department provides general information to domestic parties, such as the Althingi, the labour market partners, financial institutions and the media, in addition to special studies and reports. The Department issues the Ministry's Weekly Web Release and a set of economic indicators. In co-operation with the Financial Management Department, it prepares and issues a monthly report on Treasury Finances. The Ministry increasingly uses the Internet for its information distribution and intends to eventually make its macro-economic forecasting model available on the Internet for public use.

International co-operation
The Department is actively involved in international co-operation, mainly in the Nordic area, the OECD, the IMF and EFTA/EU. It participates in a number of committees and working groups and prepares a number of special studies. It prepares ministerial meetings in international fora. Last but not least, it prepares a growing volume of information on economic and fiscal developments for the above agencies as well as for rating agencies, financial institutions and others.