Household gross disposable income is estimated to have increased by 9.9% in the fourth quarter of 2023, compared with last year’s corresponding quarter. Disposable income per capita amounted to just over 1.4 million ISK in the quarter and is estimated to have increased by 7.5% compared with the fourth quarter of 2022. Due to increased inflation rate, the purchasing power of household disposable income per capita in the fourth quarter of 2023 decreased by 0.4% compared with last year’s corresponding quarter, but the consumer price index increased by 7.9% during the same period.
Household total income increased by 10.6% in the fourth quarter of 2023, compared with last year’s corresponding quarter, where wages and salaries increased by 9% and property income increased by 15.3%. Household total expenditure increased by 11.5% in the fourth quarter of 2023, compared with last year’s corresponding quarter, where taxes on wages and salaries increased by 8.2% and interest expenses increased by 27.2%.
Social benefits other than social transfers in kind are estimated to have increased by roughly 9.6% in the fourth quarter of 2023, compared with last year’s corresponding quarter, equivalent to 14.2% of household total income in the quarter. The household sector net social contribution increased by 6.3% in the fourth quarter of 2023, compared with last year’s corresponding quarter.
Household gross disposable income is estimated to have increased by 9.6% from 2022 to 2023. Disposable income per capita amounted to roughly 5.5 million ISK in 2023 and is estimated to have increased by 6.9% from the previous year with 2.5% increase in population. The purchasing power of household disposable income per capita decreased by 1.7% during the same period due to an increase in the consumer price index by 8.8% over the year.
Increase in household income from wages and salaries
Household total income is estimated to have increased by 12.3% in 2023 from the previous year. Increase in wages and salaries bears the brunt of the total increase, increasing by 220 billion ISK from the previous year or 11.1%. For the same period, taxes on income increased by 63.5 billion ISK or about 10.7%. According to Statistics Iceland wage index, salaries in Iceland increased by 9.8% in 2023 from the previous year while the number of employed persons increased by 4.4% during the same period.
Household interest expenses are estimated to have increased by 45.4% in 2023 from the previous year. During the same period, household property income increased by 24.1%, where household interest income increased by 51%.
Social benefits other than social transfers in kind decreased by roughly 1.3%
Social benefits other than social transfers in kind are estimated to have decreased by roughly 45 billion ISK from 2022, an increase of 8.8%.
The share of social benefits other than social transfers in kind of household total income was measured at 14.4% in 2023, compared with just under 15% in 2022 and 16.9% in 2021.
The household sector’s net social contributions increased by 6.8% in 2023 compared with 2022.
The method for estimating the population was revised in March 2024 and the time series updated from 1998. These are preliminary figures and thus Statistics Iceland will continue to publish revised figures when exhaustive information is available, e.g. tax returns from corporations and individuals.