Iceland’s annual inflation rate increased to 5.4% in March 2026, up from 5.2% recorded in both January and February. This was the highest rate since September 2024. The acceleration was driven by faster price growth in several categories, including transport (6.1% vs 4.2% in February), food and non-alcoholic beverages (5.8% vs 5.6%), alcoholic beverages and tobacco (3.7% vs 3.6%), information and communication (2.5% vs 2.4%), and personal care, social protection, and miscellaneous goods and services (5.1% vs 4.4%).
At the same time, prices for education services were unchanged, maintaining an annual increase of 3.8%. Deflation in furnishings, household equipment, and routine maintenance also moderated, with prices declining by 0.1% compared with a 0.8% drop in February.
In contrast, inflation eased in several major categories: housing and utilities (6.9% vs 7.2%), recreation and culture (3.6% vs 3.7%), restaurants and accommodation services (5.7% vs 6.3%), health (4.4% vs 4.5%), and clothing and footwear (2.3% vs 3.6%).
On a monthly basis, consumer prices rose by 0.6% in March, slowing from a 0.9% increase in February.
