The current account surplus measured 7.5 b.kr. in Q2/2023. This represents an improvement of 19.1 b.kr. relative to the previous quarter and 45.2 b.kr. relative to Q2/2022. There was a deficit on goods trade in the amount of 84.1 b.kr and an 87.7 b.kr. surplus on services trade. The surplus on primary income amounted to 17 b.kr., whereas there was a 13.1 b.kr. deficit on secondary income.

The improvement in the current account balance relative to the same quarter in 2022 stems from a more favourable primary income balance in the amount of 47.3 b.kr., owing mainly to a poorer performance among foreign-owned companies classified as direct investment. The surplus on services trade increased by 45.2 b.kr., whereas the deficit on good trade grew by 44.7 b.kr. The deficit on secondary income was larger by 2.7 b.kr.

At the end of the quarter, the net international investment position was positive by 1,158 b.kr., or 28.8% of GDP. It improved by 173 b.kr., or 4.3% of GDP, during the quarter. External assets totalled 5,193 b.kr. at the end of the quarter, and external liabilities were 4,035 b.kr. During the quarter, the position deteriorated by 11 b.kr. as a result of financial transactions, as foreign assets decreased by 89 b.kr. and foreign liabilities decreased by 77 b.kr. Price and exchange rate movements during the quarter increased asset values by 113 b.kr. and lowered the value of liabilities by 35 b.kr., thereby yielding an improvement of 148 b.kr. in the net external position. The króna depreciated by 0.1% in terms of the trade-weighted index. Prices in foreign securities markets rose by 6% between quarters, and prices in the domestic stock market fell by 10.4%.

Revision of statistics
Statistics have been revised as of Q1/2019. This represents a regular revision according to the predetermined review schedule. The main changes involve figures from the Central Bank’s annual sample of direct investment. Also included are Statistics Iceland’s revised figures on goods and services trade, published last month. The effect of the revision is strongest in 2021 and 2022, but much weaker in 2020 and 2019. The larger current account deficit since the last publication is due in part to increased expenditures falling under reinvestment in direct investment, totalling 19.5 b.kr. in 2021 and 26.4 b.kr. in 2022. This is due to an improved operating performance by foreign-owned domestic companies and the recognition of income by parent companies according to the equity method. It is offset by revised figures on goods and services trade for 2022, which increase revenues by 12.2 b.kr. The deterioration in the external position for the same years is also due to direct investment.