In Q1/2026, Iceland’s current account showed a deficit of 32.1 b.kr., or 2.5% of GDP. It improved by 7 b.kr. between quarters and by 38.2 b.kr. relative to the same quarter in 2025. The balance on goods trade was negative by 23.4 b.kr., while there was a 29.3 b.kr. surplus on services trade (See Statistics Iceland website). The deficit on primary income was 20.6 b.kr., and the deficit on secondary income was 17 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 Q1/2026 and the external position of the economy at the end of the quarter.
Table 1. Balance of payments
| B.kr. | 2025/1 | 2025/2 | 2025/3 | 2025/4 | 2026/1 |
|---|---|---|---|---|---|
Current account balance | -70.2 | -105.4 | 33.1 | -39.1 | -32.1 |
Balance on goods | -84.4 | -125.6 | -101.7 | -73.4 | -23.4 |
Balance on services | 17.8 | 58.8 | 147.1 | 49.4 | 29.3 |
Balance on primary income | 9.1 | -25.7 | 3.5 | 0.7 | -20.6 |
Secondary income, net | -12.8 | -12.8 | -15.9 | -15.8 | -17.3 |
Capital account | -1.0 | -1.0 | 160.7 | -1.3 | -1.0 |
Financial account | -43.9 | -56.2 | 193.8 | -56.6 | 28.5 |
Direct investment | -83.7 | -6.4 | 93.8 | -32.3 | -21.3 |
Portfolio investment | 40.3 | -95.5 | 21.2 | -50.6 | 5.4 |
Derivatives | 0.0 | -1.1 | -3.9 | 0.6 | -0.7 |
Other investments | 5.1 | 0.9 | 60.0 | 12.5 | 55.9 |
International reserves | -5.6 | 45.9 | 22.7 | 13.2 | -10.9 |
Net errors and omissions | 27.3 | 50.1 | 0.0 | -16.2 | 61.6 |
The net international investment position was positive by 2,178 b.kr., or 42.9% of GDP, and deteriorated by 104 b.kr., or 2.1% of GDP, during the quarter. External assets totalled 6,900 b.kr. at the end of the quarter, and external liabilities were 4,722 b.kr. Foreign assets increased by 85 b.kr. and foreign liabilities by 55 b.kr. as a result of financial transactions. Price and exchange rate movements during the quarter lowered asset values by 230 b.kr. and lowered the value of liabilities by 75 b.kr., thereby yielding a deterioration of 155 b.kr. in the net external position. The króna appreciated during the quarter by just under 1.4% in terms of the trade-weighted index. Prices in foreign securities markets fell by 3.9% between quarters, and prices in the domestic stock market fell by 5.6%.
Table 2. Quarter-on-quarter change in international investment position
| Position at end-Q4/2025 | Financial account | Exchange rate and price changes | Other changes | Position at end-Q1/2026 | |
|---|---|---|---|---|---|
b.kr. | |||||
Foreign assets, total | 7,052 | 85 | -230 | -7 | 6,900 |
Direct investment | 863 | 33 | -13 | -4 | 879 |
Portfolio investment | 4,339 | 19 | -197 | 0 | 4,161 |
Derivatives* | 15 | 1 | 5 | 0 | 21 |
Other investments | 867 | 43 | -12 | -4 | 894 |
International reserves | 968 | -11 | -13 | 0 | 944 |
Foreign liabilities, total | 4,769 | 55 | -75 | -28 | 4,722 |
Direct investment | 1,797 | 54 | -14 | -9 | 1,828 |
Portfolio investment | 1,734 | 14 | -58 | 0 | 1,690 |
Derivatives* | 11 | 0 | 6 | 0 | 17 |
Other investments | 1,227 | -13 | -9 | -19 | 1,187 |
Net international investment position (NIIP) | 2,283 | 28 | -155 | 21 | 2,178 |
% of GDP | 45.0% | 0.6% | -3.1% | 0.4% | 42.9% |
*Other changes are included under price and exchange rate changes for derivatives.