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Inflation rate decreasing

28.09.2022 - 20:21
Mynd með færslu
 Mynd: Kristinn Þeyr Magnússon - RÚV
The 12-month inflation rate has gone down between months and now stands at 9.3 percent, down from 9.7 percent last month. The rate peaked in July at 9.9 percent. The current inflation rate with housing excluded is seven percent.

According to new data from Hagstofa Íslands (Statistics Iceland), the consumer price index rose by 0.09 percent between months and is, based on pricing in September, 555.6 points. The consumer price index without housing included also rose by 0.09 percent since August and stands at 460 points.

The price of clothes and shoes rose 4.6 percent, and household electronics by 5.4 percent—likely due to the end of summer sales. The cost of flight tickets fell by 17.9 percent, meanwhile.

The latest economic forecast from Landsbankinn predict the inflation rate will continue to subside in the coming months, to a forecast 8.3 percent in December and 8.2 percent by the New Year. The peak was in July, the bank believes.

The outlook has improved, the forecast continues. Just two weeks ago, Landsbankinn forecast an annualised inflation rate of 8.8 percent by the end of the year—0.6 percent higher than the revised forecast issued today.

The monetary policy committee of the Central Bank of Iceland will announce its interest rate decision next week. Landsbankinn predicts the Central Bank will slow down its recent programme of rate rises. The base interest rate in Iceland has risen from 0.75 percent to 5.5 percent since March 2021. Rate rises are a tool used by the Central Bank to help bring inflation down.

The Central Bank's target inflation rate is just 2.5 percent, meaning there is still a way to go.

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