Iceland Inflation Rate Steady at 5.2%

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.

The inflation rate in Iceland rose to 4.5% year-on-year in December 2025 from 3.7% in the previous month. This marked the highest reading since January as prices increased for housing, water, electricity, gas and other fuels (7.1% vs 6.5% in November), health (4.2% vs 3.7%), communications (1% vs 0.7%), recreation and culture (2.8% vs 2.3%), hotels, cafés, and restaurants (5.4% vs 4.8%), and miscellaneous goods and services (4.1% vs 3.5%). At the same time, costs recovered for clothing and footwear (0.8% vs -2.3%), furnishings and household equipment (0.3% vs -1.2%), and transport (2.3% vs -0.1%), while price growth remained unchanged for alcoholic beverages and tobacco (5.4%) and educational services (2.4%). Meanwhile, inflation slowed for food and non-alcoholic beverages (5.5% vs 6%). On a monthly basis, consumer prices rose by 1.2% in December, the fastest pace in over a year, rebounding from a 0.5% decline in the previous period.