In Q4/2025, Iceland’s current account showed a deficit of 38 b.kr., or 3% of GDP. It deteriorated by 72.1 b.kr. between quarters but improved by 48.4 b.kr. relative to the same quarter in 2024. The balance on goods trade was negative by 73.4 b.kr., while there was a 49.4 b.kr. surplus on services trade. (See Statistics Iceland website) The surplus on primary income totalled 1 b.kr., while the deficit on secondary income was 15 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 Q4/2025 and the external position of the economy at the end of the quarter.
Texti undir töflu 1 (Einnig IIP frétt): At the end of Q4, the net international investment position was positive by 2,189 b.kr., or 44.2% of GDP. It improved by 98 b.kr., or 2% of GDP, during the quarter. External assets totalled 7,024 b.kr. at the end of the quarter, and external liabilities were 4,835 b.kr. Foreign assets increased by 19 b.kr. and foreign liabilities by 98 b.kr. as a result of the transactions. Price and exchange rate movements during the quarter increased asset values by 297 b.kr. and increased the value of liabilities by 143 b.kr., thereby yielding an improvement of 154 b.kr. in the net external position. The króna depreciated by 3.3% in terms of the trade-weighted index. Prices in foreign securities markets rose by 3% between quarters, and prices in the domestic stock market rose by 9%.
Table 1. Balance of payments
| B.kr. | 2024/4 | 2025/1 | 2025/2 | 2025/3 | 2025/4 |
|---|---|---|---|---|---|
Current account balance | -86.4 | -69.8 | -104.0 | 34.1 | -38.0 |
Balance on goods | -97.3 | -84.4 | -125.6 | -101.7 | -73.4 |
Balance on services | 53.1 | 17.8 | 58.8 | 147.1 | 49.4 |
Balance on primary income | -27.1 | 9.1 | -24.7 | 3.6 | 1.0 |
Secondary income, net | -15.0 | -12.4 | -12.4 | -14.9 | -15.0 |
Capital account | -1.0 | -1.0 | -1.0 | 160.7 | -1.3 |
Financial account | -122.8 | -77.8 | -60.4 | 176.3 | -78.7 |
Direct investment | -362.7 | -119.1 | -11.9 | 74.9 | -38.7 |
Portfolio investment | 188.6 | 40.3 | -95.5 | 21.2 | -50.7 |
Derivatives | -3.6 | 0.0 | -1.1 | -3.9 | 0.6 |
Other investments | 45.7 | 6.5 | 2.3 | 61.5 | -3.0 |
International reserves | 9.2 | -5.6 | 45.9 | 22.7 | 13.2 |
Net errors and omissions | -35.5 | -7.0 | 44.6 | -18.5 | -39.4 |
At the end of Q4, the net international investment position was positive by 2,189 b.kr., or 44.2% of GDP. It improved by 98 b.kr., or 2% of GDP, during the quarter. External assets totalled 7,024 b.kr. at the end of the quarter, and external liabilities were 4,835 b.kr. Foreign assets increased by 19 b.kr. and foreign liabilities by 98 b.kr. as a result of the transactions. Price and exchange rate movements during the quarter increased asset values by 297 b.kr. and increased the value of liabilities by 143 b.kr., thereby yielding an improvement of 154 b.kr. in the net external position. The króna depreciated by 3.3% in terms of the trade-weighted index. Prices in foreign securities markets rose by 3% between quarters, and prices in the domestic stock market rose by 9%.
Table 2. Quarter-on-quarter change in international investment position
| Position at end-Q3/2025 | Financial account | Exchange rate and price changes | Other changes | Position at end-Q4/2025 | |
|---|---|---|---|---|---|
b.kr. | |||||
Foreign assets, total | 6,742 | 19 | 297 | -35 | 7,024 |
Direct investment | 823 | 17 | 27 | -4 | 863 |
Portfolio investment | 4,145 | -20 | 213 | -12 | 4,325 |
Derivatives* | 17 | 1 | -3 | 0 | 15 |
Other investments | 836 | 9 | 27 | -19 | 853 |
International reserves | 922 | 13 | 33 | 0 | 968 |
Foreign liabilities, total | 4,652 | 98 | 143 | -58 | 4,835 |
Direct investment | 1,800 | 56 | 48 | -49 | 1,855 |
Portfolio investment | 1,635 | 30 | 68 | 0 | 1,734 |
Derivatives* | 7 | 0 | 4 | 0 | 11 |
Other investments | 1,210 | 12 | 23 | -9 | 1,235 |
Net international investment position (NIIP) | 2,091 | -79 | 154 | 23 | 2,189 |
% of GDP | 42.2% | -1.6% | 3.1% | 0.5% | 44.2% |
*Other changes are included under price and exchange rate changes for derivatives.
Press release no. 20/2025
4 December 2025