STOCKHOLM, Jan. 11 (Xinhua) -- Iceland appreciates IMF's approval of the 4th review of Iceland's economic recovery program, said Arni Pall Arnason, Icelandic minister of economic affairs on Tuesday.

"The approval of the review is an important milestone," said Arnason in a statement reaching here from Iceland.

"We appreciate the positive feedback from the Fund regarding the disciplined austerity measures put forth by the government and our handling of economic policy," Arnason said.

He noted that by accelerating private debt restructuring, Iceland's policy paves the way for economic recovery in the coming months and further strengthen the financial sector.

The Executive Board of the International Monetary Fund (IMF) has approved the fourth review of the Economic Recovery Program agreed by the IMF and the Icelandic government, according to the statement.

This will open the way for disbursement of the fourth tranche of the Fund's loan provided to the Icelandic government amounting to around ISK 19 billion (16 million U.S. dollars), the statement said.

In addition, financing assurances by the Nordic countries are also expected to come following the review.

Upon the conclusion of the review, the Icelandic government sent the IMF a new Letter of Intent, describing Iceland's economic policy.

The Letter states that an economic recovery is gradually taking hold, apparently by the continued stability of the krona, a declining debt path and falling inflation.

Trade surpluses have allowed authorities to begin purchases of foreign currency to bolster reserves. Recent indicators suggest that demand is slowly picking up, and growth is expected to turn positive in 2011.

Measures including building a solid financial system and control of household and corporate debts will continue.