Iceland economy returns to growth after banking meltdown

ICELAND'S economy grew by 3.3 per cent in the last quarter of 2009 but contracted by 6.51 per cent over the whole of last year, according to official data.

The figures were released as the country was poised a referendum on plans to repay the UK and the Netherlands debts owed from the collapse of Icesave bank.

Plans to fork out 3.8bn euros (£3.4bn) has proved unpopular with voters.

The performance of the economy was the best since the country's financial system nearly collapsed in 2008.

Antje Praefcke, an analyst at Commerzbank said: "That's a nice number, but it's not springtime
yet. Maybe there's less snowfall, but it's not spring yet."