Iceland Inflation Hits 5.4% in March as Food and Fuel Costs Rise

2026-03-26 - 10:42

Inflation in Iceland continued to rise in March, reaching 5.4%, up 0.2 percentage points from February. This is the highest rate since August 2024 and represents a 1.7 percentage point increase since November. According to the Central Bank of Iceland, rising food and beverage costs were a major contributor, climbing 0.7% month-on-month. Fuel prices also surged, with petrol increasing by 5.8% and diesel by 6.9% over the same period. What's the Story? Inflation in Iceland: 5.4% in March 2026, up 0.2 percentage points from February Food and non-alcoholic beverages: +0.7% month-on-month; petrol: +5.8%; diesel: +6.9% Highest inflation rate since August 2024; 1.7 percentage points increase since November 2025 Icelandic króna. Photo: Golli. Iceland Review. As reported by RÚV, economists had expected a slower rise, making these figures more pronounced than anticipated. After a steady decline from July 2024 until March last year, inflation hovered around 4% until November, when it finally reached 3.7%. Since then, it has remained above this level, marking a prolonged period of growing living costs. In his interview on RÚV, an economy expert expressed concerns that the sustained increase in inflation will have real consequences for households across Iceland. The economist emphasised that policymakers may need to consider additional measures to address these persistent price pressures.