Confederation of Labor Warns Against Hyper-Inflation Skip to content

Confederation of Labor Warns Against Hyper-Inflation

The Icelandic Confederation of Labor (ASÍ) has sent out an emergency alert because purchasing power has not been safeguarded and hyper-inflation is raging in Iceland. ASÍ said there is no real cooperation with the government to resolve the problem.

ASÍ states that the prerequisites of the current wage contracts are no longer being met, which were based on the belief that inflation would be kept at bay and that purchasing power would be safeguarded, Fréttabladid reports.

“We have not had any real discussions or cooperation [with the government] on finding solutions to the problems in the economy,” said Gylfi Arnbjörnsson, managing director of ASÍ. “The labor movement will now go to its grassroots contingencies and discuss how the movement can solve this problem in February.”

ASÍ calls for extensive collaboration between the government, labor unions and employers to come to terms with this hyper-inflation.

“Inflation is far too high and that is a matter of great concern. It keeps the policy rate high and causes diminished purchasing power among wage earners,” said Foreign Minister Ingibjörg Sólrún Gísladóttir, adding, however, that she believes the inflation will drop rapidly in the near future.

Inflation is currently at 14.5 percent, a record high since July 1990.

For the past 12 months the consumer price index has increased by 14.5 percent and the increase in August was 0.9 percent compared to July, according to new numbers from Statistics Iceland that were revealed yesterday.

Prime Minister Geir H. Haarde is out of the country but will present a report on the economic situation to Althingi parliament on Tuesday of next week.

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