Household gross disposable income is estimated to have increased by 9% in the first quarter of 2025, compared with last year‘s corresponding quarter. Disposable income per capita amounted to little under 1.6 million ISK in the quarter and is estimated to have increased by 7.5% compared with the first quarter of 2024. Due to inflation rate, the purchasing power of household disposable income per capita in the first quarter of 2024 increased by 3.2% compared with last year’s corresponding quarter, but the consumer price index increased by 4.2% during the same period.
It should be noted that this release is accompanied by a revision of sector accounts and production approach time series in accordance with the comprehensive revision of national accounts time series. The revision of the production approach time series has a direct impact on sector accounts figures. Further discussion on the revision of the production approach along with a reference to an explanatory note can be found later in this publication.
The total income of the household sector increased by 7.4% in the first quarter of 2025 compared with the first quarter of the previous year. The largest increase was in wages and salaries which are estimated to have increased by 7.9% from last year’s corresponding quarter. It is estimated that property income increased by 6% during the same period, but income from interests increased by 10.3%.
Social benefits, covering social benefits and pensions paid, increased by 9.2% in the quarter, of which pension increased by 11.6%.
Total expenditure of the household sector increased by 5.4% in the first quarter of 2025 compared with the first quarter of the previous year. Taxes on income are estimated to have increased by 4.1% and net social contributions increased by 5.2% from last year’s corresponding quarter.
Property expenditure is estimated to have increased by 1.5% in the first quarter of 2025 compared with last year’s corresponding quarter where interest payments increased by 1.6% during the same period.
These are preliminary figures and thus Statistics Iceland will publish revised figures when exhaustive information is available, e.g. tax returns from corporations and individuals.
Revised results of the production approach to GDP
Following a comprehensive revision of the national accounts, the production approach time series have been updated for the period 1995-2024. A detailed discussion on the revision can be found in the publication Benchmark revision of national accounts 1994-2024.
The effects of the revision vary across industries, but two changes are particularly noteworthy. First, revisions to indirectly measured financial services (FISIM) have caused significant changes in the data on financial and insurance activities. Second, revisions to government final consumption expenditure have had a considerable impact on data for public administration and defence; education; and human health and social work activities.
Alongside the benchmark revisions, the published results of the production approach now include a new activity covering the operations of multinational enterprises, where the scale of internal cross-border transactions may not align closely with the actual economic activities, such as investment, number of employees, and production.
This publication also marks a directional change in how the results of the production approach are presented. Specifically, three new tables now cover all production approach results. The first table consolidates the eight previously used tables for current price figures. It presents results by activity, component, and year in current prices. The second table shows aggregates by component and year in current prices. The third table includes figures on output, intermediate consumption, gross value added, and consumption of fixed capital by activity and year, presented in current prices, previous year‘s prices, and constant prices (base year 2020).
As part of this restructuring, the tables Gross domestic factor income by kind of activity and Gross domestic product by industries, volume indices have been removed. Since the first new table consolidates the eight historical tables used to present current price results, these eight tables are scheduled to be removed with the next revision. The tables to be discontinued are:
- Gross output by kind of activity
- Intermediate consumption by kind of activity
- Gross value added by kind of activity
- Consumption of fixed capital by kind of activity
- Compensation of employees by kind of activity
- Operating surplus, net, by kind of activity
- Taxes on products
- Subsidies on products
In addition, the labour productivity table has been updated to reflect the revised results of the production approach.