Please note that this press release was corrected 31 May 2021 at 12:00. Rather than remaining stable, the business sector investment excluding capital formation in ships, aircraft and large-scale industries increased by 5.3% in volume in the first quarter of 2021.
Gross Domestic Product (GDP) is estimated to have decreased by 1.7% in volume in the first quarter of 2021 compared with the same quarter of 2020. Gross domestic final expenditure increased by 1.7% during the quarter where household final consumption expenditure increased by 0.8%, government final consumption expenditure by 2.9% but gross fixed capital formation is estimated to have decreased by 2.9%. Due to a greater decrease in exports than imports in the first quarter of 2021, external trade contributes negatively to GDP growth.
Household final consumption expenditure increased by 0.8%
After a decrease in household final consumption expenditure during the last three quarters, a moderate growth, 0.8%, is estimated in the first quarter of 2021. Like the recent quarters, domestic household consumption expenditure increased while a considerable decrease is estimated in direct purchases abroad by resident households.
Decrease in investment
Business sector investment decreased by 4.9% in volume during the first quarter of 2021 compared with the same period in 2020. Business sector investment excluding capital formation in ships, aircraft and large-scale industries has increased by 5.3% in volume in the first quarter of 2021 compared with last year’s corresponding quarter. A decrease in residential investment (GFCF in dwellings) is estimated at 8.8%, while government investment increased by 18.7% in volume during the quarter. Overall, gross fixed capital formation decreased by 2.9% in volume in the first quarter of 2021.
Negative balance of trade in goods and services
In the first quarter of 2021, a decrease was measured in most external trade items as exports fell by 20% in volume and imports by 11.3%. External trade therefore contributes negatively to GDP growth during the quarter. Exports of services decreased by 52% during the quarter, while exports of goods increased by 4.6%. The imports of goods decreased by 1.5%, while imports of services decreased by 30%.
The deficit in the balance of trade in goods was 21.9 billion ISK in the first quarter of 2021, with total exports and imports of goods measured as 165 billion ISK and 187 billion ISK. In the balance of trade in services, a deficit of 10.9 billion ISK was measured in the first quarter of 2021, but the balance of trade in services has not been negative on a quarterly basis since 2007. Total exports and imports of services measured as 58.7 billion ISK and 69.6 billion ISK.
Seasonally adjusted figures
Seasonally adjusted GDP decreased by 5.2% in volume in the first quarter of 2021 compared with the fourth quarter of 2020. Seasonally adjusted growth in household consumption expenditure is estimated at 2.5% during the quarter compared with the previous quarter, 0.7% growth in government consumption expenditure and a 7.5% decrease in gross fixed capital formation. According to seasonally adjusted figures for the quarter, exports are estimated to have decreased by 6.9% and imports increased by 6.4% compared with the fourth quarter of 2020.
| Quarterly national accounts, 1st quarter of 2021 | |||
| Current prices million ISK | Volume change on the same period of the previous year, % | Volume change from previous quarter, % | |
| 1st quarter | 1st quarter | 1st quarter | |
| Private final consumption | 386,026 | 0.8 | 2.5 |
| Government final consumption | 211,781 | 2.9 | 0.7 |
| Gross fixed capital formation | 140,975 | -2.9 | -7.5 |
| Changes in inventories | 6,321 | 1.1 | … |
| Gross domestic final expen | 745,102 | 1.7 | -0.8 |
| Exports of goods and services | 223,637 | -20.0 | -6.9 |
| Imports of goods and services | -256,422 | -11.3 | 6.4 |
| Gross domestic product | 712,317 | -1.7 | -5.2 |