Iceland Inflation Rate
Year-on-year change in the consumer price index (CPI).
Inflation Rate in Iceland increased to 5.63 percent in Aug 2026 from 5.25 percent in Jul 2026.
Iceland Inflation Rate — History
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Iceland Inflation Rate — analysis in simple words
Latest reading
Inflation Rate in Iceland increased to 5.63 percent in Aug 2026 from 5.25 percent in Jul 2026.
It has risen in each of the last three months.
Recent trend
A year earlier (Aug 2025) it was 3.8%, so the latest figure is 1.9 percentage points higher.
Over the past five years the average was 6.4%, with a range from 3.7% to 10.2%. The latest value is below that five-year average.
Historical context
This data series starts in Jan 1960 and has 800 monthly observations. The latest reading is higher than 44% of all of them.
The highest value on record is 102.2% (Aug 1983) and the lowest is -4.1% (Jan 1960). The long-run average is 14.6%.
Compared with other countries
Among 197 economies with recent data, Iceland ranks 48th from the top. The median across all these economies is 3.3%, so Iceland is above the typical country.
Within Europe & Central Asia (52 economies with data) it ranks 11th; the regional median is 3.3%.
Context
With the policy rate at 8.00%, the “real” interest rate (policy rate minus inflation) is about 2.37%.
IMF outlook
The IMF World Economic Outlook projects 5.6% in 2026 and 3.6% in 2027 for Iceland. Projections are forecasts, not actual data, and are revised as new information arrives.
Statistics
- Latest
- 5.6%Aug 2026
- Previous
- 5.3%
- 5-year average
- 6.4%
- Long-run average
- 14.6%since Jan 1960
- All-time high
- 102.2%Aug 1983
- All-time low
- -4.1%Jan 1960
- Observations
- 800Monthly
Recent Data
| Period | Value | Change |
|---|---|---|
| Aug 2026 | 5.6% | ▲ +0.4 pp |
| Jul 2026 | 5.3% | ▲ +0.0 pp |
| Jun 2026 | 5.2% | ▲ +0.1 pp |
| May 2026 | 5.1% | ▼ −0.1 pp |
| Apr 2026 | 5.2% | ▼ −0.1 pp |
| Mar 2026 | 5.4% | ▲ +0.2 pp |
| Feb 2026 | 5.2% | ▲ +0.0 pp |
| Jan 2026 | 5.2% | ▲ +0.7 pp |
| Dec 2025 | 4.5% | ▲ +0.8 pp |
| Nov 2025 | 3.7% | ▼ −0.6 pp |
| Oct 2025 | 4.3% | ▲ +0.2 pp |
| Sep 2025 | 4.1% | ▲ +0.4 pp |
| Aug 2025 | 3.8% | ▼ −0.3 pp |
| Jul 2025 | 4.0% | ▼ −0.1 pp |
| Jun 2025 | 4.2% | ▲ +0.4 pp |
| May 2025 | 3.8% | ▼ −0.4 pp |
| Apr 2025 | 4.2% | ▲ +0.4 pp |
| Mar 2025 | 3.8% | ▼ −0.4 pp |
| Feb 2025 | 4.2% | ▼ −0.4 pp |
| Jan 2025 | 4.6% | ▼ −0.1 pp |
| Dec 2024 | 4.8% | ▼ −0.0 pp |
| Nov 2024 | 4.8% | ▼ −0.3 pp |
| Oct 2024 | 5.1% | ▼ −0.3 pp |
| Sep 2024 | 5.4% | ▼ −0.6 pp |
| Aug 2024 | 6.0% | ▼ −0.3 pp |
| Jul 2024 | 6.3% | ▲ +0.5 pp |
| Jun 2024 | 5.8% | ▼ −0.4 pp |
| May 2024 | 6.2% | ▲ +0.2 pp |
| Apr 2024 | 6.0% | ▼ −0.8 pp |
| Mar 2024 | 6.8% |
Inflation Rate — Iceland vs Peers
Latest available reading for each economy (periods may differ). Iceland highlighted.
More Iceland indicators
Understanding Inflation Rate — a simple guide
What it measures
The year-on-year change in the consumer price index (CPI) — the cost of a representative basket of goods and services bought by households.
How it is calculated
The statistics office tracks the prices of a fixed “basket” of goods and services that a typical household buys — food, fuel, rent, clothes, transport, education and more. The inflation rate is the percentage change in the price of this basket compared with the same month a year earlier.
If the basket cost ₹10,000 in July last year and ₹10,440 in July this year, the inflation rate is 4.4%.
High inflation means money buys less than before. Central banks often respond by raising interest rates, which can affect loans, bond prices and the stock market.
Low inflation means prices are stable. Very low or negative inflation (deflation) can be a sign of weak demand.
Why it matters for the economy and markets
Inflation erodes purchasing power and is the primary target of most central banks. Persistent inflation above target usually leads to higher policy rates; low inflation gives room for easing.
How to read it
Many central banks target around 2% (India targets 4% within a 2–6% band). Monthly data shows turning points earlier than annual averages; base effects from the previous year can make the year-on-year figure swing.
What to look at alongside it
Core inflation (without food and fuel), the policy interest rate, wage growth and oil prices.
Key terms
- CPI
- Consumer Price Index — the index used to measure household inflation.
- YoY
- Year-on-year: compared with the same period one year earlier.
- Deflation
- A sustained fall in the general price level (negative inflation).
- Core inflation
- Inflation excluding volatile items like food and energy.
Data source
Bank for International Settlements (BIS) (series WS_LONG_CPI/771), monthly data from Jan 1960 to Aug 2026. Values are shown exactly as published by the source and may be revised later.
How to use the chart
Use the 5Y / 10Y / 25Y / Max buttons to change the time range, or drag the slider under the chart. Hover (or tap) on the line to see the exact value for any period. Dashed lines and hatched bars are IMF projections, not actual data. The “Download CSV” button gives you the full data series.
Frequently asked questions
What is the current inflation rate of Iceland?
What is the highest and lowest inflation rate of Iceland?
What is the IMF projection for Iceland inflation rate?
What does inflation rate measure?
Data are sourced from official international organisations (IMF, World Bank, BIS) and national authorities, and are shown for educational and informational purposes only. They are not investment advice and no recommendation is made. Figures may be revised by the source; IMF figures for the current and future years are projections. This page was last updated on Saturday, October 17, 2026.