Exodus From Iceland
On Friday I outlined how the economic problems in Latvia were impacting upon the political scene. So, as I glanced around the crisis-hit countries of Europe for signs of social and political changes, I chanced upon recently released Icelandic immigration figures, which show a massive turnaround in local migration trends occurred in 2008.
Iceland – Migration Patterns
Immigration fell from 12,546 in 2007 to 10,288 (which I estimate was still equivalent to 3.3% of the total population), but the more significant number was the slump in net immigration from 5,132 to 1,144. This was the lowest net outturn since 2004, and I retain my view that net immigration looks set to turn negative in 2009. Indeed, the latest government forecasts concur with this view. Statistics Iceland is expecting a net outflow of 4,771 people in 2009, 3,209 in 2010 and 2,289 in 2011, before a small inflow of 108 people in 2012.
Although the forthcoming outflow of migrant workers will represent a ‘brain drain’, and potentially open up a skills gap once the economy starts to pick up again, it does have a significant benefit for Iceland. The outflow of unemployed workers equivalent to over 3% of the total population will help to reduce the stress on the Icelandic public purse, which is already under severe strain following a massive contraction in revenues, and calls for ever higher spending. Business Monitor International forecasts fiscal deficits of 13.0% of GDP this year and 6.0% of GDP in 2010, which would be higher if more social spending was required. In addition, higher emigration will also help to cushion the decline of other significant comparative indicators including employment levels and GDP per capita.
October 30th, 2011 at 12:38 am
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