Introduction
This analysis draws on data published by Eurostat and the Organisation for Economic Co-operation and Development (OECD). All values are updated in real-time, typically on the 18th–20th of each month when data providers publish final figures. We will examine:
- Annual inflation (how prices have changed compared to the same month in the previous year)
- Monthly inflation (price changes compared to the previous month)
- Price level changes relative to 2015 (which provides a better understanding of changes over time)
As inflation represents a long-term structural trend, the annual rate provides the most meaningful indicator of price dynamics.
Overall Inflation
- In December 2025, Iceland's annual inflation rate amounted to 4%, and the monthly rate was 0.9%.
- For comparison, the annual inflation rate was 2.3% in the European Union and 1.9% in the euro area.
- Since 2015, consumer prices in Iceland have risen by 33.4%, showing the cumulative effect of inflation.
Food
- In December 2025, Iceland's annual food inflation rate was 5.8%, and the monthly rate was -0.2%.
- For comparison, the annual food inflation rate was 2.8% in the European Union and 2.5% in the euro area.
- Food prices in Iceland have changed by 54.3% in total since 2015.
Alcohol and Tobacco
- In December 2025, Iceland recorded an annual alcohol and tobacco inflation rate of 5.4%, and the monthly rate was -0.1%.
- For comparison, the annual alcohol and tobacco inflation rate was 4% in the European Union and 2.7% in the euro area.
- Since 2015, alcohol and tobacco prices in Iceland have increased by 47.8%.
Clothing
- In December 2025, Iceland's annual clothing inflation rate stood at 0.8%, and the monthly rate was 3.4%.
- For comparison, the annual clothing inflation rate was 0.3% in the European Union and 0.3% in the euro area.
- Clothing prices in Iceland have changed by 7.2% since 2015.
Housing and Utilities
- In December 2025, Iceland's annual housing and utilities inflation rate was 7.5%, and the monthly rate was 1%.
- Across the European Union, the annual housing and utilities inflation rate was 2%, compared with 1.2% in the euro area.
- Since 2015, housing and utilities prices in Iceland have changed by 72.6% in total.
Household Equipment
- In December 2025, Iceland's annual household equipment inflation rate amounted to 0.4%, and the monthly rate was 1.7%.
- For comparison, the annual household equipment inflation rate was 0.3% in the European Union and 0.2% in the euro area.
- Household equipment prices in Iceland have changed by 20.6% since 2015.
Healthcare
- In December 2025, Iceland's annual healthcare inflation rate stood at 4%, and the monthly rate was 0.9%.
- For comparison, the annual healthcare inflation rate was 2.9% in the European Union and 2.3% in the euro area.
- Healthcare prices in Iceland have changed by 38.2% since 2015.
Transport
- In December 2025, Iceland's annual transport inflation rate was 1.5%, and the monthly rate was 1.9%.
- For comparison, the annual transport inflation rate was 1.2% in the European Union and 1.4% in the euro area.
- Transport prices in Iceland have changed by 15.3% since 2015.
Communications
- In December 2025, Iceland recorded an annual communications inflation rate of 4.6%, and the monthly rate was 0.4%.
- For comparison, the annual communications inflation rate was -0.1% in the European Union and -0.9% in the euro area.
- Communications prices in Iceland have changed by -50.9% since 2015.
Recreation and Culture
- In December 2025, Iceland's annual recreation and culture inflation rate amounted to 3.3%, and the monthly rate was 0.2%.
- For comparison, the annual recreation and culture inflation rate was 1.5% in the European Union and 1.2% in the euro area.
- Recreation and culture prices in Iceland have changed by 37.0% since 2015.
Education
- In December 2025, Iceland's annual education inflation rate was 3.9%, and the monthly rate was 0%.
- For comparison, the annual education inflation rate was 4.4% in the European Union and 3.6% in the euro area.
- Education prices in Iceland have changed by 26.7% since 2015.
Restaurants and Hotels
- In December 2025, Iceland's annual restaurants and hotels inflation rate stood at 5.2%, and the monthly rate was 0.7%.
- For comparison, the annual restaurants and hotels inflation rate was 4% in the European Union and 3.6% in the euro area.
- Restaurants and hotels prices in Iceland have changed by 52.2% since 2015.
Energy
- In December 2025, Iceland recorded an annual energy inflation rate of 2.4%, and the monthly rate was 0.1%.
- For comparison, the annual energy inflation rate was -1.1% in the European Union and -1.9% in the euro area.
- Energy prices in Iceland have changed by 45.9% since 2015.
Services
- In December 2025, Iceland's annual services inflation rate amounted to 5.3%, and the monthly rate was 1.2%.
- For comparison, the annual services inflation rate was 3.7% in the European Union and 3.4% in the euro area.
- Services prices in Iceland have changed by 35.8% since 2015.
Frequently Asked Questions
In December 2025, annual inflation in Iceland was 4%, representing a change of +0.6 percentage points compared to the previous period.
The current price index (2015=100) shows 133.36 for Iceland as of December 2025. This means prices have risen significantly since the 2015 baseline year.
Month-over-month price changes in December 2025 were 0.9% in Iceland.
The inflation measurement in Iceland is composed of several key components, each with different weights in the overall index (per 1,000 of consumer expenditure):
- Food and non-alcoholic beverages: 151.25
- Alcoholic beverages, tobacco and narcotics: 33.58
- Clothing and footwear: 39.79
- Housing, water, electricity, gas and other fuels: 109.17
- Furnishings, household equipment and routine household maintenance: 52.8
- Health: 30.67
- Transport: 172.19
- Communication: 30
- Recreation and culture: 130.01
- Education: 9.81
- Restaurants and hotels: 178.31
- Miscellaneous goods and services: 62.42
- Total: 1,000
Inflation in Other Countries
Compare Iceland's inflation results with other European countries to explore broader regional trends.
Methodology and Data Sources
This analysis utilizes real-time data from Eurostat, processed and visualized through Monitly's analytics platform. All charts and statistics are updated automatically to reflect the latest available information.