External trade surplus in July
Islandsbanki Research News: According to final figures published this morning by Statistics Iceland (SI), the July surplus in external goods trade proved to be ISK 6.8 billion (bn), or slightly higher than SIs provisional figure earlier this month of a surplus of ISK 6.4bn, due to somewhat higher exports. By comparison, in July 2008 the external trade deficit was ISK 33.3bn. Goods exports in July this year totalled ISK 41.7bn, a YoY drop of ISK 8bn. Imports, however, fell much more drastically, and amounted to only ISK 34.9bn in July this year compared to ISK 83bn last year, at fixed exchange rates.
During the first seven months of 2009, the external balance of trade in goods is in surplus by ISK 39.8bn, which is a YoY improvement of ISK 111.1bn. At fixed exchange rates, however, the value of goods exports YtD was 28.7% less than during this same period in 2008. The greatest decrease is in the value of manufactured goods exported, particularly aluminium, while exports of vessels and aircraft and of marine products also dropped. Aluminium prices fell steeply during the latter half of 2008, with the result that in H1 2009 the world market price for aluminium in USD terms was around half that of a year earlier. Fisheries product prices also decreased on global markets during this same period.
Manufacturing products comprised 48.9% of total exports, although their value was 30.3% less than in the previous year. The value of fisheries exports, which comprised 44.7% of total exports, was down by 13.8%. At the same time, the value of goods imports was 49.9% less YoY, at fixed exchange rates, with the contraction affecting most import sectors and greatest in industrial supplies, transport equipment and capital goods. The contraction in imports indicates how sharply domestic demand has declined since the recession hit with full force in the latter half of 2008.