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Inflation Reaches Four-Year High

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Inflation Reaches Four-Year High

Icelandic money krónur

Photo: Golli.

The rate of inflation in Iceland over the past 12 months is 2.8 percent, RÚV reports. It has not been as high since January 2014, when it measured 3.1 percent.

The numbers come from Statistics Iceland, which gives two main reasons for the increase. Firstly, the end of winter sales means clothing and footwear prices have risen by 4.4 percent. Secondly, the cost of owner occupied housing (imputed rent) rose by 1.4 percent.

Inflation has been low in Iceland in recent years when compared to historic figures and had remained below target between January 2014 and the present month. Target inflation is at 2.5 percent.

Housing prices drive inflation in Iceland. When inflation is calculated without taking housing prices into account, the resulting figures show deflation.

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