Fitch Revises Iceland´s Outlook to Positive; Affirms IDR at ‘A’

Core Viewpoint - Fitch Ratings has upgraded the Outlook on Iceland's Long-Term-Foreign-Currency Issuer Default Rating to Positive from Stable while affirming the IDR at 'A' [1] Group 1: Economic Indicators - Iceland's public finances have strengthened, with general government debt expected to decline significantly by 2025 due to the settlement of the Housing Financing Fund's liabilities and the full privatization of Islandsbanki [2] - The economy is diversifying into higher-value-added sectors such as pharmaceuticals, ICT, and biotechnology, which enhances resilience against external shocks [2] - Iceland's renewable energy resources and competitive energy prices are attracting investments in energy-intensive data centers, indicating a positive investment climate [2] Group 2: Rating Implications - Increased confidence in a sustained decline in the government debt/GDP ratio, along with strong economic growth and diversification, could lead to positive rating actions [3] - A deterioration in the debt/GDP trajectory due to fiscal loosening or severe economic shocks could result in negative rating actions [4]