REYKJAVIK (AFP) - Iceland received 300 million euros (429 million dollars) from its Nordic neighbours Monday in the first part of a loan aimed at helping the country through its deep economic crisis.

"The first part of a loan from the Nordic countries was today paid to Iceland," the central bank said in a statement.

Denmark, Sweden, Finland and Norway in July signed loan agreements of 1.78 billion euros for crisis-stricken Iceland, with payouts dependent on the country's economic progress.

The loans are in addition to a 2.1-billion-dollar (1.5-billion-euro) bailout from the International Monetary Fund (IMF), of which two instalments worth a total of 1.1 billion dollars have been disbursed so far.

The IMF announced last week that it had reached an agreement on the third instalment of its loan, pending approval by its board in January, but the amount was not specified.

While Iceland drew 300 million euros from the Nordic loan, it could have drawn up to 444 million.

"It was not considered necessary at this time to use more of the loan agreement and thus 144 million euros will move to the next (review) period," which starts in mid-January.

A North Atlantic island of just 320,000 inhabitants, Iceland suffered a major economic blow in October 2008 when its three main banks collapsed, bringing to a screeching halt a decade of prosperity as the state took over the banks.

Thousands of Icelanders lost their jobs and their savings as a result.

In August, the central bank forecast a recession of 9.0 percent for this year, slightly better than initially expected. The economic slump is however expected to continue next year, with the economy forecast to contract by 2.0 percent.