30.07.2010 15:18
The merchandise account surplus for the month of June totalled ISK 8.7 bn. Merchandise exports totalled ISK 48 bn during the month, while imports were just over ISK 39.3 bn. The merchandise trade surplus for the first half of the year amounted to ISK 63.6 bn, much larger than for the same period in 2009, when it measured ISK 39.3 bn. The outlook is for a continuing sizeable merchandise trade surplus, as the prices of Iceland's chief export products have risen sharply since the first half of 2009 and imports of consumer and investment goods look set to remain modest until the economy recovers. We consider it likely that the merchandise account surplus will exceed ISK 100 bn this year, as opposed to a surplus of ISK 90.3 bn in 2009. This year's surplus could range between 7% and 8% of GDP, as compared with last year's figure of 6%.
Unusually sizeable investment product imports in JuneIt is interesting to note that investment product imports accounted for over a fourth of all goods imported in June. Imported investment products amounted to ISK 10.2 bn, the largest total in a single month in the history of Statistics Iceland (SI) measurements. It appears paradoxical that such a record should be broken at the bottom of a recession, when investment is at a low ebb. It should be borne in mind, however, that the depreciation of the króna skews the picture and that investment product imports were probably much larger in volume terms during the pre-crisis upswing. In the first half of the year, imports of investment products increased by about 80% year-on-year at constant exchange rates, but the comparison period was unusually sluggish in terms of investment imports. Nonetheless, the increase suggests that the economy may be rallying a bit.
Export values riseIn ISK terms, export values were higher in June than ever before. They hit an all-time high for the first half of the year as well, totalling ISK 277.4 bn for the period, due to substantially higher aluminium prices and somewhat higher marine product prices in the first half of 2010 than in the latter half of 2009. The ISK has appreciated as well. Export values have risen in all major product categories, led by industrial products and aluminium, thanks to relatively high aluminium prices. Aluminium production in Iceland has remained stable, however, since the Alcoa Fjarðaál aluminium smelter reached full capacity and the expansion of the Norðurál smelter at Grundartangi was completed in the winter of 2007-2008. Marine product exports have also been robust so far in 2010, with values rising by 12.4% year-on-year.