FX.co ★ Iceland Inflation Rate Cools to a Four-Year Low Again

In May 2025, Iceland's annual inflation rate decreased to 3.8%, aligning with March's four-year low, from 4.2% in April. Price reductions were observed in transport (0.9%, down from 2.6% in April), recreation and culture (2.9%, down from 3.2%), and miscellaneous goods and services (4.1%, down from 5.3%). Inflation rates for housing and utilities remained constant at 7.2%, while a reduction was seen in the cost of furnishings and household equipment, which decreased by 0.7% from a previous increase of 1.6%. Conversely, there was a more rapid increase in the prices of food and non-alcoholic beverages, rising to 5.9% from 5.6%, and communications, which increased to 1.7% from 0.6%. On a month-to-month comparison, consumer prices saw a 0.2% rise in May, marking the slowest rate of increase in four months, following a 0.9% rise in April.