Iceland’s consumer confidence rises

ICELAND’S consumer confidence rose this month as seasonal demand drove down unemployment and after the government moved closer to obtaining the next installment of an international loan.

The index rose to 24.9 points from 20.9 points the previous month, the Capacent Gallup poll showed.

Unemployment dropped to 8% last month, a fourth monthly decline after peaking at 9.1% in April, the country’s Labor Directorate said on Aug. 13. The government of Prime Minister Johanna Sigurdardottir last week secured parliamentary backing for an agreement with the UK and the Netherlands to cover foreign depositor claims, bringing the island closer to receiving the next tranche of its International Monetary Fund bailout.

Iceland’s economy will shrink 9.1% in 2009, the central bank said this month, raising an earlier forecast for an 11% contraction.

The Capacent confidence survey is based on responses from 800 Icelanders out of a population of 319,000 and is conducted in the first 2 weeks of the month.