Poll finds Iceland government failing on economic priorities

A large majority of Icelanders believe the government is performing poorly on two key economic challenges, Morgunblaðið reported, citing a Gallup poll conducted for Viðskiptablaðið.

Seven in 10 respondents said the government was doing badly at helping to lower interest rates, while 69 percent said it was performing poorly in reducing inflation.

Among respondents who expressed a clear opinion, dissatisfaction was even higher. Eighty-seven percent said the government was handling interest rates poorly, and 85 percent gave it a poor rating on inflation. Only 13 percent and 15 percent, respectively, said it was doing well.

Discontent also extends into the governing parties’ support bases. Supporters of the Social Democratic Alliance were the most favourable towards the government, but only about one-third said it was performing well on these issues. Thirty-eight percent answered neither well nor poorly, while one-quarter said it was doing poorly.

Only about one in six supporters of the Viðreisn party said the government was doing well at lowering inflation and interest rates. More than twice as many, 37 percent, said it was doing poorly on both issues. Among People’s Party voters, the judgement was harsher still, with nearly 60 percent saying the government was performing poorly in both areas.

The results varied between demographic groups. University graduates were more tolerant of the government than people with less education, although they generally expressed this through a neutral response rather than approval. Place of residence also appeared to matter. Reykjavík residents were less negative than people living outside the capital area, where 76 percent said the government was doing poorly.

Younger groups had the least confidence in the government’s economic management, particularly people aged 30 to 39.

The results may partly reflect the latest interest-rate decision. A week before the report, the Central Bank raised its key interest rate to 8 percent, the third increase of the year, while inflation stood at 5.3 percent in July. The decision was made halfway through the polling period and therefore may have influenced the results, but did not account for them entirely.

Gallup conducted the poll from August 13 to 24. The sample consisted of 1,952 people, of whom 747 responded, producing a response rate of 38.3 percent. The results were weighted.