Resilient domestic demand helped limit Iceland's economic contraction in 2020, which amounted to almost 7% in real terms; the recovery will largely depend on how well tourism rebounds, in our view. Authorities offered significant fiscal and monetary policy support, although we expect most measures will be rolled back toward year-end 2021. Contrary to previous crises, external pressures have been manageable; the current account remained in a narrow surplus, external leverage is comparatively low, and central bank reserves ample. We affirmed our 'A/A-1' ratings on Iceland. The outlook is stable. On May 14, 2021, S&P Global Ratings affirmed its 'A/A-1' long- and short-term sovereign credit ratings on Iceland. The outlook is stable. The stable outlook indicates that Iceland's economy is likely
