Iceland’s current account showed a surplus of 26.9 b.kr., or 2.1% of GDP, in Q3/2025. This represents an improvement of 137.3 b.kr. relative to the previous quarter but a deterioration of 14.1 b.kr. relative to Q3/2024. The goods account balance was negative in the amount of 101.6 b.kr., while the balance on services was positive by 137.4 b.kr. (See Statistics Iceland website) The surplus on primary income was 6.2 b.kr., while the deficit on secondary income was 15.1 b.kr. (Table 1).
It should be noted that the unusually large revenue entry in the capital account is due to an Icelandic biotechnology company’s sale of intellectual property to a foreign entity.
This is included in new information published on the Central Bank of Iceland website, showing the preliminary balance of payments in Q3/2025 and the external position of the economy at the end of the quarter.
Table 1. Balance of payments
| B.kr. | 2024/3 | 2024/4 | 2025/1 | 2025/2 | 2025/3 |
|---|---|---|---|---|---|
Current account balance | 41.0 | -84.9 | -56.9 | -110.4 | 26.9 |
Balance on goods | -75.2 | -97.3 | -84.4 | -125.6 | -101.6 |
Balance on services | 131.7 | 53.1 | 17.8 | 58.8 | 137.4 |
Balance on primary income | -5.2 | -25.7 | 22.1 | -30.8 | 6.2 |
Secondary income, net | -10.3 | -15.0 | -12.4 | -12.7 | -15.1 |
Capital account | -0.3 | -1.0 | -1.0 | -1.0 | 160.7 |
Financial account | 81.4 | -111.7 | -42.7 | -106.5 | 214.7 |
Direct investment | -11.5 | -346.6 | -109.4 | -58.3 | 111.1 |
Portfolio investment | 27.5 | 183.1 | 65.7 | -96.2 | 23.5 |
Derivatives | -2.8 | -3.6 | 0.0 | -1.1 | -3.9 |
Other investments | 70.3 | 46.2 | 6.5 | 3.1 | 61.3 |
International reserves | -2.1 | 9.2 | -5.6 | 45.9 | 22.7 |
Net errors and omissions | 40.7 | -25.8 | 15.1 | 4.8 | 27.1 |
At the end of Q3, the net international investment position was positive by 2,101 b.kr., or 43.2% of GDP. It improved by 252 b.kr., or 5.2% of GDP, during the quarter. Foreign assets increased by 66 b.kr. and foreign liabilities declined by 149 b.kr. owing to financing activities. Price and exchange rate movements during the quarter increased asset values by 174 b.kr. and increased the value of liabilities by 134 b.kr., thereby yielding an improvement of 40 b.kr. in the net external position. The exchange rate of the króna was virtually unchanged in trade-weighted terms during the quarter. Prices in foreign securities markets rose by 7% between quarters, and prices in the domestic stock market rose by 1.6%. External assets totalled 6,789 b.kr. at the end of the quarter, and external liabilities were 4,688 b.kr.
Table 2. Quarter-on-quarter change in international investment position
| Position at end-Q2/2025 | Financial account | Exchange rate and price changes | Other changes | Position at end-Q3/2025 | |
|---|---|---|---|---|---|
b.kr. | |||||
Foreign assets, total | 6,560 | 66 | 174 | -11 | 6,789 |
Direct investment | 866 | -2 | 0 | 0 | 864 |
Portfolio investment | 3,975 | 15 | 162 | 0 | 4,152 |
Derivatives* | 15 | -4 | 6 | 0 | 17 |
Other investments | 810 | 35 | 0 | -11 | 834 |
International reserves | 893 | 23 | 6 | 0 | 922 |
Foreign liabilities, total | 4,711 | -149 | 134 | -8 | 4,688 |
Direct investment | 1,832 | -114 | 131 | -15 | 1,835 |
Portfolio investment | 1,643 | -9 | 5 | 0 | 1,639 |
Derivatives* | 7 | 0 | -2 | 0 | 5 |
Other investments | 1,228 | -26 | 0 | 7 | 1,209 |
Net international investment position (NIIP) | 1,850 | 215 | 40 | -3 | 2,101 |
% of GDP | 38.0% | 4.4% | 0.8% | -0.1% | 43.2% |
*Other changes are included under price and exchange rate changes for derivatives.
Press release no. 20/2025
4 December 2025