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Use of credit cards on the increase

A new report from Statistics Iceland reveals that the net turnover from Icelandic credit cards rose by 17 percent in the first five months of 2007, compared to the same period in 2006. At the same time, net turnover from debit cards only rose by 3.3 percent.

In an interview with national radio RÚV, Ingólfur Bender, head analyst of Glitnir Bank, pointed out that this indicates that private consumption is on the increase again, after a brief slump in the first three months of 2007. As a consequence, inflation will not decrease as quickly as forecast.

That in turn could delay any decisions from the Central Bank of Iceland to lower interest rates.

Statistics Iceland also announced that the cost-of-living index has gone up by 0.22 percent last month which means that inflation is 3.8 percent on a 12-month basis. Inflation has decreased significantly in the last few months. In March this year, it was 7.4 percent on a 12-month basis.

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