FX.co ★ Iceland Inflation Rate Slows to Near 5-Year Low

In November 2025, Iceland's annual inflation rate eased to 3.7%, down from October's 4.3%, reaching its lowest point since December 2020. There was a notable deceleration in price increases for several categories: alcoholic beverages and tobacco saw a decrease to 5.4% from 5.8% the previous month; housing, water, electricity, gas, and other fuels decreased to 6.5% from 7.1%; communications slowed to 0.7% from 0.8%; recreation and culture softened to 2.3% from 3.4%; and miscellaneous goods and services eased to 3.5% from 4.2%. Furthermore, costs fell in clothing and footwear, dropping by 2.3% from a slight rise of 0.2%; furniture and household equipment reversed to a 1.2% decrease from a 1.3% increase; and transport decreased by 0.1% from an increase of 0.8%. On the other hand, there were price increases in food and non-alcoholic beverages, which rose to 6% from 5.8%, health which increased to 3.7% from 3%, and hotels, cafés, and restaurants which edged up to 4.8% from 4.7%. On a monthly scale, consumer prices decreased by 0.5%, countering the previous month's 0.5% rise.