Iceland records 120.3 billion-krona current-account deficit

Iceland’s foreign current-account deficit widened sharply in the second quarter of 2026, reaching 120.3 billion kroner, or 9.3% of gross domestic product. The deficit increased by 91.4 billion kroner from the previous quarter and was 4.4 billion kroner worse than in the same quarter of 2025.

The preliminary figures from the Central Bank of Iceland cover the country’s balance of payments and international investment position. A current-account deficit weakens the country’s net foreign position, either by increasing foreign liabilities or reducing foreign assets.

The goods balance recorded a deficit of 154.4 billion kroner. A services surplus of 66.6 billion kroner partly offset it. The deficit on primary income stood at 18 billion kroner, while secondary income recorded a 14.5 billion-krona deficit.

Yet Iceland’s net international position improved during the quarter. It stood at 2,408 billion kroner at the end of June, equivalent to 46.9% of GDP, after rising by 351 billion kroner, or 6.8% of GDP. Foreign assets totaled 7,448 billion kroner and foreign liabilities 5,040 billion kroner.

Capital transactions increased assets by 124 billion kroner and liabilities by 137 billion. Currency and price changes added 420 billion kroner to the value of assets and 24 billion kroner to liabilities, producing a 397 billion-krona improvement in the net position. The króna weakened by 0.5% against the trade-weighted exchange-rate index, while foreign securities prices rose 13.3% and domestic stock prices increased 0.2%.