From Iceland – Highest inflation in 16 months

Inflation in Iceland is now higher than it has been for 16 months. Twelve-month inflation now stands at 3.5%, a report from RÚV revealed this morning. It has not been higher than this since May last year, when it was 3.6%.

According to a new survey by Statistics Iceland, prices of furniture, household appliances and related products have risen by 4%. If household goods were not included, inflation would be higher at 3.9%.

From December last year to June this year, inflation rose from 1.7% to 2.6%. In July, it rose to 3%: it has now increased in three consecutive measurements.

The news follows a macroeconomic forecast from Íslandsbanki, which predicts that although growth will certainly slow down this year, promises of a coronavirus vaccine could see the economy bounce back in the spring of 2021.