The deficit on Iceland's current account in the first
half of 2003 amounted to 17.9 billion kr. according to preliminary figures from
the Central Bank. In the second quarter the current account deficit amounted to
15.2 billion kr., compared with 1.5 b.kr. at the same time in 2002. Measured at
fixed exchange rates(1), exports of goods and services contracted by 2.3% while
imports increased by 10.2% from the same period the previous year. The combined
deficit on the income account (compensation of employees, interest payments, and
dividends and reinvested earnings) and current transfer was 9 b.kr. in the first
half of 2003, which was somewhat less than in the same period last year.
Balance of payments in b.kr.
Exports of goods and
services
Imports of goods and
services
Income and current transfer,
net
Capital
and Financial Account
Financial
account excl. reserves
Reserve assets (-
increase)
Capital inflow measured 40.5
b.kr. during the first half of the year, mainly explained by foreign borrowing
and bond issues outside Iceland, but there was also an inflow of 11.8 b.kr. from
non-residents' purchases of bonds issued in Iceland. Capital outflows in
connection with portfolio investment abroad amounted to 14.1 b.kr., which is
more than double the figure for the same period the year before. Some outflow
reflected direct disinvestment from Iceland. A high level of other investment
was recorded in the first half of 2003, in particular in the form of foreign
deposits of Icelandic banks. The Central Bank's foreign reserves amounted to
36.9 b.kr. at the end of June and had changed little since the beginning of the
year.
The large negative figure for
errors and omissions during the first half of the year is assumed to result from
lags in the reporting of capital outflows, in the form of either increased
assets or decreased liabilities.
Iceland's net international
investment position was negative by 572 b.kr. at the end of June and had
decreased by 9.3 b.kr. since the beginning of the year due to the appreciation
of the króna and an increase in the value of foreign portfolio investments.
Detailed information on the balance of payments and external position is
presented in the attached tables.
Today, Monday 1 September 2003,
the Central Bank is publishing tables showing the balance of payments and
external position on the Statistics page of its website (www.sedlabanki.is).
For further information contact Jakob Gunnarsson, Division
Chief at the Statistics Department of the Central Bank of Iceland, tel. (+354)
569-9600.
(1) The trade-weighted exchange
rate index was 9.9% lower during the first half of 2003 than in the same period
the previous year.
No. 16/2003
1 September 2003