In Q2/2026, Iceland’s current account showed a deficit of 120.3 b.kr., or 9.3% of GDP. It deteriorated by 91.4 b.kr. between quarters and by 4.4 b.kr. relative to the same quarter in 2025. The balance on goods trade was negative by 154.4 b.kr., but the balance on services trade was positive by 66.6 b.kr. (See Statistics Iceland website). The deficit on primary income was 18.0 b.kr., and the deficit on secondary income was 14.5 b.kr. (Table 1).
This is included in new information published on the Central Bank of Iceland website, showing the preliminary balance of payments in Q2/2026 and the external position of the economy at the end of the quarter.
Table 1. Balance of payments
| B.kr. | 2025/2 | 2025/3 | 2025/4 | 2026/1 | 2026/2 |
|---|---|---|---|---|---|
Current account balance | -115.9 | 27.8 | -34.5 | -28.8 | -120.3 |
Balance on goods | -128.1 | -101.7 | -73.5 | -23.0 | -154.4 |
Balance on services | 61.9 | 149.3 | 52.5 | 33.4 | 66.6 |
Balance on primary income | -32.8 | 0.5 | 6.2 | -19.1 | -18.0 |
Secondary income, net | -16.8 | -20.4 | -19.8 | -20.1 | -14.5 |
Capital account | -1.0 | 160.7 | -1.3 | -1.0 | -1.2 |
Financial account | -62.5 | 190.6 | -15.1 | 24.1 | -12.7 |
Direct investment | -12.2 | 91.4 | 9.5 | -27.4 | 15.0 |
Portfolio investment | -95.5 | 20.8 | -50.2 | 7.8 | -65.4 |
Derivatives | -1.1 | -3.9 | 0.6 | -0.7 | 1.6 |
Other investments | 0.5 | 59.7 | 11.7 | 55.3 | 18.0 |
International reserves | 45.8 | 22.7 | 13.2 | -10.9 | 18.2 |
Net errors and omissions | 54.3 | 2.2 | 20.7 | 53.9 | 108.8 |
At the end of Q2, the net international investment position was positive by 2,408 b.kr., or 46.9% of GDP. It improved by 351 b.kr., or 6.8% of GDP, during the quarter. External assets totalled 7,448 b.kr. at the end of the quarter, and external liabilities were 5,040 b.kr. Foreign assets increased by 124 b.kr. and foreign liabilities by 137 b.kr. as a result of financial transactions. Price and exchange rate movements during the quarter increased asset values by 420 b.kr. and increased the value of liabilities by 24 b.kr., thereby yielding an improvement of 397 b.kr. in the net external position. The króna depreciated by 0.5% in terms of the trade-weighted index. Prices in foreign securities markets rose by 13.3% between quarters, and prices in the domestic stock market rose by 0.2%.
Table 2. Quarter-on-quarter change in international investment position
| Position at end-Q1/2026 | Financial account | Exchange rate and price changes | Other changes | Position at end-Q2/2026 | |
|---|---|---|---|---|---|
b.kr. | |||||
Foreign assets, total | 6,920 | 124 | 420 | -16 | 7,448 |
Direct investment | 895 | 9 | 5 | -15 | 893 |
Portfolio investment | 4,163 | 24 | 411 | 0 | 4,597 |
Derivatives* | 21 | 2 | -10 | 0 | 13 |
Other investments | 896 | 72 | 5 | -1 | 972 |
International reserves | 944 | 18 | 10 | 0 | 973 |
Foreign liabilities, total | 4,862 | 137 | 24 | 17 | 5,040 |
Direct investment | 1,967 | -6 | 13 | 1 | 1,975 |
Portfolio investment | 1,687 | 89 | 8 | 0 | 1,785 |
Derivatives* | 17 | 0 | -3 | 0 | 14 |
Other investments | 1,191 | 54 | 5 | 16 | 1,266 |
Net international investment position (NIIP) | 2,057 | -13 | 397 | -33 | 2,408 |
% of GDP | 40.0% | -0.2% | 7.7% | -0.6% | 46.9% |
*Other changes are included under price and exchange rate changes for derivatives.