The value of exported goods from Iceland amounted to 67.8 billion ISK fob in July 2021 and the value of imported goods 84,7 billion ISK cif (78.4 billion ISK fob). Thus, there was a trade deficit, calculated on fob/cif value, of 16.9 billion ISK as compared with a trade deficit of 18.8 billion ISK in July 2020 at current rates of exchange. For the period August 2020 to July 2021, the deficit in balance of trade in goods was 187.8 billion ISK or 24.8 billion ISK more than for the previous 12 months. The deviation from previously published 12-month import value is due to changes in treatment of certain leases of ships and aircrafts as reported later in this newsletter.
Value of exported goods increased by 15.2% in 12-month comparison
The value of exported goods in July was 21.1 billion ISK (45.0%) higher than the previous year, increased from 46.8 billion ISK to 67.8 billion ISK. The value of manufacturing products was 17.5 billion ISK higher (70.3%) than in July 2020 and the value of marine products increased by 2.0 billion ISK (10.6%).
For the period August 2020 to July 2021, the total value of exported goods was 691.4 billion ISK or 91.0 billion ISK higher (15.2%) than in the 12 months prior at current rates of exchange. Manufacturing products contributed 48.3% of the total exports, increasing by 13.4%. Marine products contributed 42.3% of total exported goods and increased by 14.2% from the previous 12 months. The value of farmed fish increased by 9.7 billion (36.8%) for the same period and was about 5.2% of the total export value of the last 12 months.
Value of imports increased by 15.2% in 12-month comparison
The value of imports of goods in July increased from 65.6 billion ISK in 2020 to 84.7 billion ISK in 2021. The value of transport equipment (including ships and aircrafts) increased by 6.9 billion ISK (77.2%), industrial supplies increased by 3.7 billion ISK (18.8%) and the value of fuels increased by 3.8 billion ISK (112.6%). Other sectors underwent minor changes.
In the last 12 months, the total value of imports of goods was 879.2 billion ISK, 115.8 billion ISK higher (15.2%) than in the previous 12 months at current rates of exchange. The increase during this twelve-month period is for all categories except for imports of fuel.
The average exchange rate index for the last 12 months was 200.1 and was 5.8% weaker than in the previous 12-month period when the average exchange rate index was 189.9. The exchange rate, on the other hand, strengthened by 6.7% in July (191.8) compared with July 2020 (205.5).
Revision of previously published figures
The treatment of certain leases of ships and aircrafts have changed from previously published figures, for the years 2018-2020. The impact of these changes appears in figures on external trade, capital formation and balance of payments. A distinction is made in the European System of Accounts (ESA 2010) between operating leases and financial leases. When assessing what should be classified as an operating or a financial lease, one has to take account of where the economic ownership of the asset in question lies, i.e. whether it is in the hands of the lessor or the lessee.
Economic ownership of an asset is not necessarily the same as legal ownership, where legal ownership refers to the registered owner of the asset in question but economic ownership takes account of who accepts the operating risks and receives the economic benefits from using the asset in a productive activity. If the lessor is the legal owner and the lessee is the economic owner a lease should be classified as financial lease. The aforementioned changes to previously published figures refer to leases of assets previously classified as operating leases and included in trade in services now classified as financial leases and included in trade in goods.
These changes lead to an increase in imports of goods as well as an increase in gross fixed capital formation, but a decrease in imports of services for the years 2018-2021. The effect will also be visible in an increase in foreign debt and interest payments.
| The value of exports and imports for 12 months period | |||
| Billion ISK at current exchange rate | August 2019-July 2020 | August 2020-July 2021 | Change, % |
| Exports fob, total | 600.3 | 691.4 | 15.2 |
| Marine products | 256.0 | 292.3 | 14.2 |
| Agricultural products including farmed fish | 32.1 | 44.3 | 37.8 |
| Manufacturing products | 294.2 | 333.7 | 13.4 |
| Other products | 18.0 | 21.1 | 17.2 |
| Imports cif, total | 763.3 | 879.2 | 15.2 |
| Food and beverages | 78.5 | 86.4 | 10.1 |
| Industrial supplies n.e.s. | 224.8 | 260.3 | 15.8 |
| Fuels and lubricants | 74.0 | 52.0 | -29.8 |
| Capital goods (except for transport) | 163.6 | 197.2 | 20.5 |
| Transport equipment | 104.8 | 133.8 | 27.7 |
| Consumer goods n.e.s. | 117.0 | 149.2 | 27.5 |
| Goods n.e.s. | 0.6 | 0.3 | -56.4 |
| Balance of trade | -163.0 | -187.8 | |