We project Iceland's economy will contract by 7.5% in 2020, reflecting COVID-19's significant blow to the country's large tourism sector. Authorities' policy response to the COVID-19 pandemic has included extensive testing and substantial fiscal and monetary stimulus packages, among other measures. In our view, Iceland's modest net general government debt enables authorities to comfortably respond to COVID-19 fallout and the economic downturn. We are affirming our 'A/A-1' sovereign credit ratings on Iceland. The outlook remains stable. On May 15, 2020, S&P Global Ratings affirmed its 'A/A-1' long- and short-term foreign and local currency sovereign credit ratings on the Republic of Iceland. The outlook remains stable. The stable outlook reflects our view that Iceland's strong fiscal and balance of payments buffers
