Second Economic Stimulus Package Introduced

The Icelandic government introduced the second phase of its economic measures yesterday, intended to limit the economic impact of the COVID-19 pandemic.

Prime Minister Katrín Jakobsdóttir tells Morgunblaðið the measures are estimated at ISK 60 billion (USD 411 million; EUR 378 million), in addition to the ISK 230-billion (USD 1.6 billion; EUR 1.5 billion) stimulus package , introduced earlier this month.

The measures include the following:

Innovation will be prioritized through increased investments and higher reimbursement for research and development.

Companies, forced to close operation for public health reasons, will receive subsidies of up to ISK 2.4 million each.

Immediate low-interest support loans will be granted to small and medium-size businesses.

Companies will be allowed to carry 2020 losses forward to offset income tax on 2019 profits.

There will be a focus on mental health with remote medical services being strengthened, and a new campaign will be launched to combat domestic violence.

Jobseekers and vulnerable groups will receive dedicated support.

There will be multi-faceted support for children and a special recreational subsidy for low-income families.

A bonus will be paid to healthcare workers, due to their heavy work load during the COVID-19 pandemic.

Funds will be allocated to support summer school terms and the creation of over 3,000 summer jobs for students in Iceland.

Study programs will be offered during the summer – work, study, and entrepreneurial projects.

Food production will be strengthened through innovation and marketing.

Private media will receive increased financial support.

Financial support for artists will increase by 40 percent.

Grants will be given to local authorities for local development objectives to be reached.

For more details, see here .

At yesterday’s press conference, Katrín noted that these are not the last economic measures to be introduced by the government in response to the pandemic.