This report supplements our research update "Iceland Outlook Revised To Positive On Strong Growth And Improving Public Finances; 'BBB-/A-3' Ratings Affirmed," published on July 18, 2014. To provide the most current information, we may cite more recent data than that stated in the previous publication. These differences have been determined not to be sufficiently significant to affect the rating and our main conclusions. The ratings are supported by high productivity and income levels and positive long-term growth prospects, as well as Iceland's generally strong institutional and governance effectiveness. The ratings are constrained by high external and public-sector debt, weak monetary flexibility, and uncertainties and risks related to the eventual lifting of ongoing capital controls. The small Icelandic economy (we estimate
