[icelandic dichotomy] two finance heads at odds

Whenever I need a lighter post, I turn to Iceland. Do not think for one second I'm making fun of them. I just love their quaint way of doing and reporting things, that's all - very direct, saying what they think, finding practical solutions and lacking hype and spin.

Take this classic from yesterday: Finance Ministry and Central Bank at odds:

At a public meeting yesterday the Finance Ministry introduced its economic forecast for the remainder of the year, which is very different from the economic forecast recently released by the Central Bank of Iceland.

According to Thorsteinn Thorgeirsson, office manager of the Finance Ministry’s economic department . . . the economy will reach equilibrium towards the end of the year and the Central Bank will reach its target inflation of a 2.5 percent, which will remain within tolerance limits over the next few years.

Thorgeirsson predicted that economic growth would be less than one percent this year, due to a reversal in foreign investment. He also predicted the trade deficit balance would go through a rapid recession and reach almost 16 percent of GDP by the end of the year, due to increased export of aluminium and a decrease in imports. Last year the trade deficit was 26.7 percent.

While Thorgeirsson predicted a soft landing for the economy, the Central Bank predicted a hard transition over the next two years, as the research department of Landsbanki Bank pointed out. Representatives of Landsbanki said the inherent differences in the two economic forecasts are “uncomfortable.”

In the Finance Ministry’s forecast, further large-scale industrial projects are not taken into account, which would have great impact on the economy, as Markadurinn reports.

I appreciate that their business is not really our concern but still - it's an interesting illustration. I'd really like to hear from our economist bloggers and others involved in finance as to whose version to believe.

In other words, who are the professionals here?