Inflation in Iceland Drops to Central Bank’s Goal

The annual inflation in Iceland has dropped to 2.6 percent, which is very close to the Central Bank’s inflation goal of 2.5 percent, visir.is reports.


From the Smáralind shopping mall in Kópavogur.

The consumer price index (CPI) based on prices in November is 365.5 points (May 1988="100)," 0.05 percent higher than in the previous month. The CPI less housing cost is 348.0 points, 0.09 percent higher than in October, as stated on the website of Statistics Iceland.

International airfares fell by 18.7 percent (effect on the index -0.18 percent), prices of petrol and diesel oil rose by 2.6 percent (0.14 percent) and prices of electricity by 7.0 percent (0.11 percent).

The CPI in November 2010 is 2.6 percent higher than in November 2009 while the CPI less housing cost is 3.7 percent higher than one year ago.

Over the last three months, the CPI has increased by 0.8 percent, equivalent to an annual inflation rate of 3.2 percent (3.6 percent inflation for the CPI less housing cost).

The CPI compiled in the middle of November 2010, 365.5 points, is applicable for indexation purposes in January 2011. The old credit terms index for January 2011 is 7,217 points.