Faroe Islands Inflation Rate Lowest Since 2020

The annual inflation rate in the Faroe Islands eased to 0.7% in the fourth quarter of 2025, easing from 1.1% in the previous three-month period. Prices increased at a softer pace for food and non-alcoholic beverages (3.8% vs 4.6% in Q3), communication (0.2% vs 0.9%), recreation and culture (4.6% vs 4.9%), and miscellaneous goods and services (1.8% vs 1.9%). Moreover, deflation worsened for housing and utilities (-8.9% vs -5.7%) and furnishings and household equipment (-2.4% vs -0.5%). Meanwhile, prices accelerated for transport (1.7% vs 0.5%), alcoholic beverages and tobacco (8.9% vs 4.7%), health (0.7% vs 0%), education (4.8% vs 3.8%), and restaurants and hotels (6.6% vs 5.6%). In addition, deflation softened for clothing and footwear (-1.4% vs -1.7%). On a quarterly basis, consumer prices fell 0.4% in Q4, reversing a 0.2% rise in the previous three-month period.

The annual inflation rate in Faroe Islands rose to 1.1% in the third quarter of 2025 from an over four-year low of 0.7% in the previous three-month period. Upward pressure mainly came from faster price increases in recreation & culture (4.9% vs 0.4% in Q2), a rebound in transport costs (0.5% vs -0.6%), and an easing decline in clothing and footwear prices (-1.7% vs -3.3%). In contrast, inflation slowed for restaurants and hotels (5.6% vs 7.2%), communication (0.9% vs 1.6%), alcoholic beverages and tobacco (4.7% vs 4.9%), and food and non-alcoholic beverages (4.6% vs 4.7%). On a quarterly basis, consumer prices increased by 0.2% in Q3, recovering from a 0.1% drop in the prior quarter.

The annual inflation rate in Faroe Islands eased to 0.7% in the second quarter of 2025 from 1.3% in the previous three-month period. It marked the lowest reading since the fourth quarter of 2020, as costs moderated for furnishings and household equipment (0.4% vs 3.0% in Q1) and recreation and culture (0.4% vs 0.5%). Additionally, prices continued to decline for clothing and footwear (-3.3% vs -2.7%), and transportation (-0.6% vs -0.1%). Prices also tumbled for housing & utilities (-4.9 vs 2.7%). In contrast, inflation increased for hotel and restaurants (7.2% vs 3.0%), communication (1.6% vs 1.1%), and food and non-alcoholic beverages (4.7% vs 4.6%). On a quarterly basis, consumer prices fell by 0.1%, reversing a 0.9% rise in the preceding quarter.