Official statistics show that the Icelandic economy emerged from recession in the third quarter of this year, growing by 1.2% after shrinking for seven consecutive quarters. The country's economy still shrank by 1.6% on an annual basis, however.

The data nonetheless announced Iceland's first quarterly growth since its once-booming financial sector ground to a halt in October 2008 when its major banks collapsed after borrowing beyond their means to fund ambitious investments abroad.

Their liabilities were once worth 11 times Iceland's total GDP. The steep recession that followed meanwhile proved less severe than many economists and the International Monetary Fund had feared.