Meginmál

Balance of payments in the third quarter of 2003 and the external position

NOTE: This article is from 02. December 2003 and is therefore more than 5 years old.


The deficit on Iceland's current account in the third quarter of 2003 amounted to 13.2 billion kr. according to preliminary figures from the Central Bank. In the third quarter of last year the current account was in surplus by 1.9 b.kr. The current account deficit amounted to 32.3 b.kr. over the first nine months of 2003, compared with a 2.1 b.kr. deficit over the corresponding period 2002. Measured at fixed exchange rates , exports of goods and services contracted by 0.8% while imports increased by 13.4% from the same period the previous year. The combined deficit on the income account (compensation of employees and investment income) and current transfer was 15.9 b.kr. in the first nine months of 2003, which was somewhat less than in the same period last year.

Balance of payments in b.kr.

 

Quarter:

July-September

 

January-September

 

2002

2003

 

2002

2003

Current Account

1.9

-13.2

 

-2.1

-32.3

   Exports of goods and services

80.8

79.0

 

236.5

217.4

   Imports of goods and services

-75.6

-87.4

 

-222.5

-233.8

   Income and current transfer, net

-3.4

-4.8

 

-16.1

-15.9

Capital and Financial Account

-12.3

16.9

 

5.7

51.0

    Financial account excl. reserves

1.4

26.4

 

22.5

60.9

    Reserve assets (- increase)

-13.6

-9.6

 

-16.7

-9.8

Net errors and omissions

10.4

-3.7

 

-3.6

-18.7

Capital inflow measured 51 b.kr. during the first nine months of the year, mainly explained by foreign borrowing; bank loans and debt securities abroad. The net capital inflow of domestic banks was 102 b.kr. over this period. Capital outflows in connection with portfolio investment abroad amounted to 27.5 b.kr., which is considerably more than the same period the year before. A high level of other investment was recorded in the first nine months of 2003, in particular in the form of foreign deposits and lending by Icelandic banks. Some outflow reflected foreign direct investment by residents net of foreign direct investment in Iceland. The Central Bank's foreign reserves amounted to 46.4 b.kr. at the end of September and had risen by 9.6 b.kr. during the third quarter.

The large negative figure for errors and omissions during the first nine months 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 596 b.kr. at the end of September, 24 b.kr. more than at the beginning of the year. The main factor at work was the current account deficit, but this was offset to some extent by 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.

On, Monday 1 December 2003, the Central Bank has published 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.

No. 27/2003
1 December 2003