It may not be breaking news, but here it goes: Iceland is in debt!
The floundering financial situation of the island nation has been common knowledge for some time, but the exact extent of the debt and the increase thereof over the past year has recently been made public via a governmental financial report delineating external and domestic debt in 2008.
Due in part to the substantial bonds granted to the Central Bank at the time of the governments take-over of the financial system, domestic debt has risen from 156.7 billion ISK to a whopping 613.8 billion ISK. That marks a nearly 400% increase over the past year. Likewise, the external debt has expanded, doubling in total from 154 billion ISK to 317.5 billion ISK. This can be partially accounted for by the devaluation of the krona and its respective rate of exchange against foreign currencies.
The Icelandic treasury’s total debt, according to the report, currently sits at 725.2 billion ISK, an increase of 437.2 billion ISK since 2008.