The deficit on Iceland's current account in the second
quarter of 2004 amounted to 16.7 billion kr. according to preliminary figures
from the Central Bank. In the second quarter of 2003 the current account deficit
was 14.5 b.kr. The current account deficit in the first half of 2004 (H1/2004)
was 27.8 b.kr., compared with just over 14.3 b.kr.
(correction)
in the corresponding period the previous year.
Measured at fixed exchange rates , exports of goods and services increased
year-on-year by 7.1% during H1/2004 while imports increased by 17.7%. The
deficit on income and current transfer, net was 4.9 b.kr. in the first half of
2004, compared with 7.4 b.kr. in the same period the preceding year.
Balance of payments in b.kr.
April-
June
January-
June
2003
2004
2003
2004
Current
Account
-14.5
-16.7
-14.3
-27.8
Exports of goods and
services
67.6
76.5
138.8
149.0
Imports of goods and
services
-78.3
-94.5
-145.6
-172.0
Income and current transfer,
net
-3.8
1.4
-7.4
-4.9
Capital and Financial Account
11.0
15.5
12.8
29.1
Financial account
excl. reserves
11.1
18.7
13.9
39.8
External assets, net
-56.8
-101.3
-77.5
-168.8
External debt, net
68.0
120.0
90.6
208.6
Reserve assets (-
increase)
0.0
-3.0
-0.2
-10.5
Net errors and
omissions
3.5
1.2
1.5
-1.2
Capital inflow measured 29.1 b.kr. in H1/2004, largely explained by
Icelandic debt instrument issues abroad. Foreign portfolio investment in Iceland
dropped significantly with net redemptions of 10 b.kr. in H1/2004. First-half
capital outflows in connection with portfolio investment abroad amounted to 33.6
b.kr. and foreign direct investment by residents to 40.2 b.kr. Other investment
outflows were also heavy, in particular foreign lending by Icelandic banks. The
Central Bank's foreign reserves amounted to 68.5 b.kr. at the end of June 2004
and had risen by 10.5 b.kr. since the beginning of the year.
Iceland's net international investment position was negative by 596.6 b.kr. at the end of June, 46.5 b.kr. more than at the beginning of the year. The higher negative investment position can be attributed to funding of the current account deficit as well as price and exchange rate movements. Detailed information on the balance of payments and the external position is presented in the attached tables, along with revised figures for the period 2001-2003 in which direct investment and returns on it have been adjusted in light of late data collection.
On Monday September 6, 2004, the Central Bank will publish tables showing the balance of payments and external position on the Statistics page of its website (www.sedlabanki.is). A table showing Iceland's gross external debt will also be published in accordance with the IMF's Special Data Dissemination Standard.
For further information contact Jakob Gunnarsson, Division Chief at the Statistics Department of the Central Bank of Iceland, tel. (+354) 569-9600.
No. 23/2004
September 2, 2004