Prices Stay Elevated as February Inflation Holds at 5.2%

2026-02-26 - 12:36

Inflation in Iceland stood at 5.2% in February, unchanged from January, marking the second consecutive month above five percent. According to the latest figures, inflation had not exceeded that level since September 2024. For greater context, the annual rate was 4.5% in December and 3.7% in November. What's the Story? 5.2% annual inflation in February, unchanged from January; 4.5% excluding housing costs Clothing and footwear +5.1%, furniture and household goods +5.4%, international airfares +6.8% Diesel −5.6% and petrol −6.0%; food and non-alcoholic beverages +0.9% Finance buildings in Iceland. Photo: Golli. Iceland Review. Prices remain elevated As reported by RÚV, the February reading was slightly higher than analysts had forecast. Excluding housing costs, inflation measured 4.5%. Several price changes contributed to the monthly movement in the consumer price index. With winter sales concluded, clothing and footwear prices rose by 5.1%, accounting for less than one fifth of the increase between months. Furniture, household appliances and related goods increased by 5.4%, with a comparable impact on the index. Food and non-alcoholic beverages rose by 0.9%. Charges for water supply, waste management and sewerage increased by 4.3%. International airfares climbed by 6.8% during the month. By contrast, fuel prices fell, with diesel down 5.6% and petrol decreasing by 6.0%. The figures indicate continued price pressures across several sectors, while some transport-related costs declined.