Iceland's economy has continued to recover, growing by more than 4% in 2021 backed by strong domestic demand. We expect the Russia-Ukraine conflict will have a limited impact on Iceland's economy given its minimal direct trade links with those countries and overall limited need for energy commodity imports. We also expect fiscal consolidation to accelerate this year, with government debt net of liquid assets settling at about 42% of GDP over the medium term. We affirmed our 'A/A-1' ratings on Iceland. The outlook is stable. On May 13, 2022, 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 our expectation that Iceland's economy will continue to recover
