Iceland posts 4.6% growth in first quarter THE Icelandic economy grew 4.6 per cent in the first three months of the year compared with the previous quarter, but consumption and investment figures were weak, Statistics Iceland says. A 4.7 percentage point contribution from inventories to the growth rate masked less flattering numbers for household consumption, which added 0.7 percentage points, and for investment, which declined by 0.6 percentage points. However, due to the difficulties in correcting for seasonal variations, the statistics agency recommends looking at the results on an annual comparison. Measured against the same quarter the previous year, growth slowed to 0.8 per cent in January through March, compared with a 1.4 per cent increase in October through December of last year. Iceland's economy expanded by 1.6 per cent in 2012 after posting 2.9 per cent growth in 2011. Reykjavik's previous leftist government earned international praise for saving the North Atlantic island from bankruptcy after its three main banks collapsed in 2008, but a voter revolt against austerity swept in a centre-right government in general elections on April 27. The new government, led by 38-year-old Sigmundur David Gunnlaugsson, has promised to boost domestic consumption and investment by reducing the burden on mortgage holders and through lowering taxes by simplifying the tax code.