Verðbólga á Íslandi

Inflation in Iceland

In Iceland, too, people are suffering from rising inflation, where the inflation rate is currently just under 10%. Experts expect a further increase to up to 11% by the end of 2022.

Especially the extremely rising rent and real estate prices contribute to this high inflation, but also the general costs of living and the costs of food are rising and rising.

Meanwhile, there are calls from the public and also the Icelandic government to actively take action against rising inflation in the country.

Supermarket Krónan freezes prices for 240 products by the end of the year

In response to these appeals, the supermarket chain Krónan recently announced that it would freeze the prices of 240 products of the house brands "Krónan" and "First Price" by the end of the year.

The price freeze affects 240 products of daily use of the two companies mentioned, namely products from toilet paper, detergent, glass cleaner, soap and sanitary napkins to dog food and cat litter to food such as rice, oatmeal, cereals, meat, canned fruit, sour cucumbers, margarine, toast, baguette, chocolate, biscuits, ice cream and chips.

The products are all listed online - and in the store there are several shopping carts at the entrance, which are packed with exactly these 240 products. 

Other companies have also spoken on this subject. For example, Hirzlan, an office furniture store, also called for everyone to work together in the face of high inflation and promised not to increase product prices for the rest of 2022.

On the other hand, the managing director of the supermarket chain Bónus explained that the idea itself was a great initiative. However, Bónus will not freeze prices, but is working every day to avoid price increases as much as possible and to pass on any price reductions directly to customers. 

IKEA said, up to now they have not yet passed on the higher costs during the Covid pandemic and the associated supply chain problems to their customers over the past two years. The furniture store always publishes the catalogue for the next 12 months in September, which in fact also fixes the prices for this period. 

In August, inflation was "only" at 9.7% 

Currently, the statistical office published a report that inflation in Iceland was 9.7% in August, compared to 9.9% in July 2022. In particular, energy prices have fallen slightly and the demand for real estate decreased a bit (due to higher interest rates of the central bank).

This at least slows down inflation slightly. Whether it's a long-term trend or just a short-term recovery remains to be seen.