2025.08.2809:17:10UTC+00Iceland Inflation Slows to Three-Month Low in August

In August 2025, Iceland experienced a reduction in its annual inflation rate to 3.8%, down from 4.0% in July, reaching its lowest level in three months. This easing was primarily attributed to reduced price increases in several sectors. Housing and utilities saw a decrease from 7.1% to 6.4%, transport from 2.5% to 1.2%, clothing and footwear from 2.9% to 1.8%, communications from 2.5% to 2.0%, recreation and culture from 2.9% to 2.6%, and miscellaneous goods and services from 4.6% to 4.2%. In contrast, there was a notable rise in the costs of food and non-alcoholic beverages, which increased to 5.5% from 5.0%, and healthcare, which ticked up slightly to 2.7% from 2.5%. The educational services sector rebounded, recording a rise of 2.2% from a significant decline of -12.3%, while furnishings and household equipment experienced a more moderate decrease of -0.7% compared to -0.9% previously. On a month-to-month basis, consumer prices saw a modest increase of 0.2% in August, following a 0.3% rise in July.