The annual inflation rate in Iceland decreased to 3.4% in January of 2019 from 3.7% in December as prices slowed for housing and utilities (4.9% vs 5.6% in December); transport (3.7% vs 4.8%); alcoholic beverages and tobacco (3.1% vs 3.4%) and continued to fall for communication (-9.1% vs -9.7%) and education (-1.7% vs -2.5%). In contrast, prices rose faster for food and non-alcoholic beverages (4.8% vs 4.7%); recreation and culture (1.1% vs 0.9%); miscellaneous goods and services (2.4% vs 2.1%); furnishing and household equipment (5% vs 4%); health (2.5% vs 1.8%) and hotels, cafés and restaurants (2.9% vs 2.8%). Prices of clothing & footwear were unchanged, after a 1.3 percent rise in December. On a monthly basis, consumer prices fell 0.4%. Inflation Rate in Iceland averaged 5.03 percent from 1989 until 2019, reaching an all time high of 25.20 percent in December of 1989 and a record low of -0.06 percent in November of 1994.
Inflation Rate in Iceland is expected to be 3.10 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Inflation Rate in Iceland to stand at 2.90 in 12 months time. In the long-term, the Iceland Inflation Rate is projected to trend around 2.70 percent in 2020, according to our econometric models.