07.12.18
S&P Global affirms Iceland at A/A1 with a stable outlook

Today S&P Global affirmed Iceland’s A/A-1 long- and short-term foreign and local currency sovereign credit ratings with a stable outlook. According to the rating agency, Iceland’s fiscal and external balance sheets have strengthened in recent years. However, the small, relatively concentrated economy remains vulnerable to external developments and the risk of reemergence of domestic overheating. S&P expects that growth rates will slow over the coming years as tourism inflows decelerate.

The stable outlook balances the potential for Iceland‘s stronger-than-anticipated fiscal and balance of payments performance against the risks posed by the economy‘s dependence on foreign trade developments and potential re-emergence of overheating stemming from the upcoming wage negotiations in 2019.

S&P could raise Iceland‘s ratings if fiscal and external balance sheets strengthen by more than presently anticipated over the next two years. Ratings could be lowered if financial stability risks or balance of payments pressures emerge over the next two years. For example if the domestic economy overheated, posing risks for Iceland‘s competitiveness and adversely affecting long-term growth prospects. This could also be the case if tourism flows slowed sharply, which could negatively affect the country‘s balance of payments performance and the banking system. According to S&P, the latter could manifest itself through an impact on the housing market, given the rapid pace of tourism-related construction projects in recent years.

Report

Aðrar fréttir

Dec 29 2025
Annual prospects
Quarterly Government Debt Management Prospect

Q1/2026

  • In Q1, Government bonds will be offered for sale in the amount of 40-60 b.kr. market value.
  • The bonds that could conceivably be offered are all benchmark Government issues, and issue size and market conditions will determine how much, if any, will be sold in each series.
  • It is possible that switch auctions of RIKS 26 0216 and RIKB 26 1015 will be held during the quarter.

GDM Q1 Prospect 2026.pdf

Dec 29 2025
Annual prospects
Government Debt Management Prospect 2026
  • Government bond issuance for 2026 is estimated at 200 b.kr. market value.
  • It is planned to issue a new nominal bond maturing in 2029. The size of the series concerned and market conditions will determine the amount sold in individual benchmark series.
  • It is possible that the Treasury’s year-2026 borrowing need will be met in part with issuance of Treasury bills, drawdowns of foreign deposits held in the Treasury’s current account with the Central Bank of Iceland, and the sale of a portion of the Housing Fund’s loan portfolio.

GDM Prospect 2026.pdf