Inflation in Iceland Breaks 18-Year Record Skip to content

Inflation in Iceland Breaks 18-Year Record

The 12-month inflation in Iceland has now reached 13.6 percent, according to new data from Statistics Iceland, and has not been higher for 18 years, since August 1990. As a consequence, the capital of mortgages grows and debt burden increases.

According to Morgunbladid, the recent depreciation of the ISK has an impact on inflation, as does the six-percent increase in price of imported goods, which account for almost two percent of the 13.6 percent inflation.

Inflation has a great impact on the debt of home owners. A loan of ISK 20 million (USD 243,000, EUR 154,000) issued by the Housing Financing Fund (HFF) increases by ISK 2.7 million (USD 33,000, EUR 21,000) after one year of a 13.6 percent inflation.

This month, Statistics Iceland recorded an unusual 0.7-percent increase in the market value of real estate in countryside Iceland, and not in the capital region, where the market value of real estate remained almost unchanged between months.

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