The analyst department of KB Bank believes that if the exchange rate of the Icelandic króna decreases inflation will increase rapidly similar to what happened in 2001. According to KB Bank inflation will not increase much next year due to the fact that the exchange rate will not decrease until the end of next year.
According to forecasts inflation for 2006 will be 3.4%; in 2007 it will reach a height of 5.3% but on average be 4.5%.
