Iceland’s economy showed a marked turnaround in early 2026, with gross domestic product rising 2.7% year-on-year in the first quarter, according to data updated on 29 May 2026. The latest figure sharply contrasts with the previous reading of a 0.6% year-on-year contraction recorded in the fourth quarter of 2025.
The data are based on year-over-year comparisons, measuring how GDP in the first quarter of 2026 compares with the same period a year earlier, while the prior figure reflected the change in the fourth quarter of 2025 versus the fourth quarter of the previous year. The shift from negative to positive territory signals a significant improvement in Iceland’s economic momentum at the start of 2026.
