Inflation Iceland 2025
Average inflation: 4.1%
Current Inflation
Inflation is high at 4.1%, well above the ECB target.
Peak and Trough
The highest inflation was in January at 4.7%. The lowest inflation was in November at 3.7%.
- Highest month
- January: 4.7%
- Lowest month
- November: 3.7%
- Difference
- 1.0 percentage points
- Months with data
- 12 of 12
Category Insights
The highest price increase was in Housing, water, electricity, gas and other fuels with an average of 7.3%. The lowest price increase was in Education with an average of -6.2%.
- Highest increase
- Housing, water, electricity, gas and other fuels: 7.3%
- Lowest increase
- Education: -6.2%
Historical Context
Current inflation is 2.2% lower than the 5-year average of 6.3%.
- 5-year average
- 6.3%
- 10-year average
- 4.4%
- All-time high (2008)
- 12.6%
- All-time low (2015)
- 1.6%
Trend
Inflation shows a downward trend. Compared to 2024, inflation has fallen by +1.8 percentage point.
- Change vs. previous year
- -1.8 percentage points
- Largest monthly swing
- March: -3.0 percentage points
ECB Target
Inflation is 2.1% above the ECB target of 2.0%. This means purchasing power is declining faster than intended.
Purchasing Power
At this inflation rate, purchasing power noticeably decreases. Without a salary increase, you can buy less with the same money.
What you could buy for €100 this year will cost approximately €104.10 next year at this inflation rate.
Multi-year trend
Monthly figures 2025
Inflation by category
Inflation differs per product group. Click on a category for the historical trend.
Month overview
| Month | Inflation | Difference vs. 2024 |
|---|---|---|
| January | 4.7% | -2.0 |
| February | 4.2% | -2.4 |
| March | 3.8% | -3.0 |
| April | 4.2% | -1.8 |
| May | 3.8% | -2.4 |
| June | 4.1% | -1.7 |
| July | 4.0% | -2.3 |
| August | 3.8% | -2.2 |
| September | 4.1% | -1.3 |
| October | 4.3% | -0.8 |
| November | 3.7% | -1.1 |
| December | 4.5% | -0.2 |
| Average | 4.1% |
Data source
Data from OECD. Last updated: 11/01/2026.