Rising Prices Likely to Affect Christmas Book Market

iceland christmas book

Inflation and the energy crisis in Europe are driving up prices for many consumer goods, and Christmas books are likely to be no exception this year.

Books are a traditional and popular Christmas gift in Iceland, so much so that the months preceding Christmas see a “jólabókaflóð,” or flood of Christmas books. The tradition is said to have originated during the Second World War, when products from Europe became scarcer. Books were largely printed locally and were seen as cheap and easily available Christmas gifts.

Read more: Icelandic Publishers Optimistic About Christmas Book Flood

In a statement to RÚV, chairman of the Association of Icelandic Book Publishers Heiðar Ingi Svansson stated that the industry hopes to avoid price increases as much as possible, but that some increases will be inevitable.

Heiðar outlined the factors contributing to rising costs: “the main ones are that the energy crisis in Europe is causing an increase in energy prices for the production of paper. In recent years, the supply of paper for book printing has also decreased due to the greater focus of paper manufacturers on producing paper for packaging production, due to the increase in online sales.”

Despite the energy crisis and rising costs, Heiðar says that the Icelandic publishing industry must still largely rely on Northern Europe for its needs. “The increase in transportation costs around the world and the fact that the state’s reimbursement of part of the production costs is limited to printing in Europe means that it is not possible for publishers to print books elsewhere in the world,” Heiðar stated. “Also, environmental considerations, including the carbon footprint, play a major role.”

Another factor keeping Icelandic publishing in Europe, and especially Germany, is the increasing time frame for printing books. Years ago, when paper was cheaper, publishers kept large stocks of paper. Now with increasing shift in logistics to “just in time” manufacturing, publishers tend to keep increasingly small stocks of paper, meaning that supplies have to be specially ordered for each print run. This means increased time between when the book is sent off to print and when it hits shelves. As a result of this, Icelandic book publishers are keen to keep the printing process as close to Iceland as possible to ensure on-time delivery.

Despite the bleak holiday forecast, Heiðar stated that “we are going to do everything in our power to hold back price increases on books before Christmas. The Christmas book is by far the most popular Christmas gift for Icelanders, and we plan to do everything we can to ensure that it remains so.”

 

Inflation Rate Drops to 9.3%

inflation rate iceland

The latest numbers from Statistics Iceland indicate a moderate decrease in the rate of inflation, with the 12-month figure being calculated as 9.3% in September.

The data from Statistics Iceland below shows monthly and yearly fluctuations in the consumer price index, with July’s level of 9.9% representing a likely maximum.

In the data from Statistics Iceland, it is noted that the price of clothes and shoes have risen by some 4.6%, and household electronics by 5.4%. Airfares have been a notable exception, decreasing by 17.9%.

Given rising interest rates and the importance of the housing market in driving inflation, inflation rates are expected to slowly decrease for the remainder of 2022.

This trend is likely reinforced by the housing market, which has shown signs of slowing recently.

inflation rate iceland
Statistics Iceland / Hagstofa Íslands

A statement from the Central Bank today notes that inflation among Iceland’s trading partners has not been higher in decades and that these international trends may also have a negative impact on Iceland.

Read more: Signs Inflation May Have Peaked in Iceland

Nevertheless, the Central Bank stresses that “the resilience of the systemically important banks is high. Their capital and liquidity position is strong. The Central Bank of Iceland’s stress test for 2022 shows that the banks have the ability to respond to external shocks and at the same time support households and businesses.”

The statement continues: “Increased external uncertainty underlines the importance of maintaining the resilience of the Icelandic financial system. The situation in this country is better than in our trading partners, but full vigilance must be maintained in order to preserve financial stability.”

Up until now, the countercyclical capital buffer (CCyB), the amount of liquid capital a financial institution holds in case of stress, has remained unchanged. As of tomorrow, September 29, the CCyB will be increased by 2%, in the event that more credit needs to be provided to the economy in the event of a downturn.

 

New Bus Fare As Of This Saturday, Including 12.5% Hike

reykjavík strætó bus

This Saturday, October 1, the new bus fare will be in effect. The fare will be raised 12.5% across the board, applying to both single tickets and monthly passes.

In the announcement, Strætó indicates that the fare has remained unchanged for some time. However, operational costs have also risen sharply recently, including 40% increases in oil prices. Strætó also claims to be especially impacted by shorter working hours in the workforce, which have resulted in operational budget deficits.

The price hike is intended to minimize further “optimization” of routes in the capital region.

Read more: Strætó Reduces Public Bus Service in Reykjavík

Despite the fare hike, Strætó emphasizes in the announcement that with plans to have a carbon-free bus fleet by 2030, Iceland will be insulated from future fluctuations in oil prices.

The new pricing structure, which was approved September 16, is listed on Strætó’s website as follows:

Single Fares

 
Adults 550 kr.
Youth 275 kr.
The elderly 275 kr.
Disabled people 165 kr.
Children, 11 years and younger 0 kr.

Seasonal Cards

 
30 DAYS 12 MONTHS
Adults 9.000 kr. 90.000 kr.
Youth 4.500 kr. 45.000 kr.
The elderly 4.500 kr. 45.000 kr.
Disabled people 2.700 kr. 27.000 kr.
Children, 11 years and younger 0 kr. 0 kr.