Iceland is among the developed countries with the least room for manoeuvre to deal with unexpected shocks to state finances, according to a new study released by the IMF.
The report deals with the debt situations of developed countries and how much capacity they have to take on more debt if needed.
Four countries are considered to be in particular potential difficulty: Greece, Italy, Portugal and Japan.
Of the approximately 20 countries mentioned in the IMF report, the authors say these four countries have the least scope to take on more public debt if unforseen economic problems hit.
The next group of countries has slighly better prospects than the previous four; but are still in poor debt shape. They are: Iceland, Ireland, Spain, the United Kingdom and the United States, RUV reports.
The report compares national debts with declared maximums. Debt among the 20 countries as a percentage of GDP is at a historic high and countries are finding it difficult to balance the books using cutbacks and organisational changes alone, RUV reports.
The countries mentioned would also battle to find loan funding at reasonable interest rates.
According to the report, the room for manoeuvre to take more loans is by far best in Australia, Denmark, Norway, New Zealand and South Korea.