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Bloomberg
It’s not often that an entire economy is thrown off course by a single corporate event. But that’s what appears to have happened in Iceland.
The recent bankruptcy of budget airline Wow Air has delivered such a blow to the Icelandic tourist industry, and the wider economy, that the central bank cut its main interest rate by half a point to 4 percent. It also said that the economy is now set to contract 0.4 percent, compared with a previous estimate for growth of 1.8 percent.
The announcement makes clear how badly Wow Air’s failure has hurt Iceland, which has also suffered from a disastrous fishing season. The airline had helped turn tourism into Iceland’s biggest cash cow, fuelling a boom that dragged the nation out of its financial collapse decade ago.