Iceland Inflation Rate Hits 9-Month High

The inflation rate in Iceland rose to 5.4% year-on-year in March 2026 from 5.2% in the previous two months. This marked the highest reading since September 2024, as prices increased for transport (6.1% vs 4.2% in February), food and non-alcoholic beverages (5.8% vs 5.6%), alcoholic beverages and tobacco (3.7% vs 3.6%), information and communication (2.5% vs 2.4%), and personal care, social protection, and miscellaneous goods and services (5.1% vs 4.4%). At the same time, prices held steady for education services (3.8%), while deflation eased in furnishings, household equipment, and routine maintenance (-0.1% vs -0.8%). Meanwhile, inflation slowed for housing and utilities (6.9% vs 7.2%), recreation and culture (3.6% vs 3.7%), restaurants and accommodation services (5.7% vs 6.3%), health (4.4% vs 4.5%), and clothing and footwear (2.3% vs 3.6%). On a monthly basis, consumer prices rose by 0.6% in March, easing from 0.9% in the previous month.

Iceland’s annual inflation rate rose to 5.2% in February 2026, matching the previous month’s peak, which was the highest level since September 2024. Prices increased for recreation and culture (3.6% vs 3.4% in January), restaurants and accommodation services (6.2% vs 6%), health (4.5% vs 3.5%), clothing and footwear (3.7% vs 0.8%), and personal care, social protection, and miscellaneous goods and services (4.5% vs 3.6%). At the same time, prices held steady for housing and utilities (7.2%) and education services (3.9%). Meanwhile, inflation eased for transport (4.2% vs 4.6%), food and non-alcoholic beverages (5.6% vs 5.8%), alcoholic beverages and tobacco (3.6% vs 4.1%), and information and communication (2.5% vs 2.7%), while deflation continued in furnishings, household equipment, and routine maintenance (-0.8% vs -0.4%). On a monthly basis, consumer prices rose to 0.9% in February, up from 0.4% in the previous month.

Iceland’s annual inflation rate rose to 5.2% in January 2026, the highest level since September 2024, from 4.5% in December 2025. Inflation accelerated for housing and utilities (7.2% versus 7.1%), transport (4.6% versus 2.3%), food (5.8% versus 5.5%), recreation and culture (3.4% versus 2.8%), hotels and restaurants (6% versus 5.4%), communication (2.7% versus 1%) and education (3.9% versus 2.4%). In contrast, prices of furnishings declined (-0.4% versus 0.3%) and a slowdown was seen for health (3.5% versus 4.2%) and alcoholic beverages and tobacco (4.1% versus 5.4%). Inflation for clothing and footwear prices remained steady at 0.8%. On a monthly basis, inflation fell to 0.4% in January, down from 1.2% in the previous month.