The Consumer Price Index (CPI), based on prices in January 2024, is 607.3 points (May 1988=100), 0.16% lower than in the previous month. The CPI less housing cost is 495.4 points, 0.50% lower than in December 2023.

Cost of owner occupied housing (imputed rent) increased by 0.9% (effect on the index 0.18%) while cost of Electricity and hot water increased by 3,7% (0,12%).

Winter sales are ongoing and prices of clothing and footwear decreased by 9.2% (-0.36%) and furniture, furnishings, etc by 5.0% (-0.29%). Furthermore, prices of international airfares decreased by 11.4% (-0.21%).

Attention should be drawn to the change that instead of taking in price changes to "044 Other services relating to the dwelling" this January, it will be done in February when the first payment, according to new tariffs, usually takes place. Refuse collection, sewerage services and water supply are covered under this heading.

The cancellation of the VAT concession on electric cars increased their price, but the electric car subsidies from Orkusjóður were considered in the calculations.

The CPI is 6.7% higher in January 2024 than in January 2023 and the CPI less housing cost is 5.2% higher than one year ago.

The CPI compiled in the middle of January 2024, 607.3 points, is applicable for indexation purposes in March 2024.

Updated consumption weights
The consumer price index is now published on a new base, December 2023. The new base reflects the outcome of Statistics Iceland's household expenditure survey 2020–2022. The three-year period is aimed to emphasise long-term change and reduce short-term fluctuation. Furthermore, Statistics Iceland utilises additional sources, such as national accounts, to consolidate results.

The rebasing of the index does not in itself cause changes in the index between December and January. The relative division of the index on the old and new basis in December 2023 can be found in the attached memorandum.

The consumption weights were updated in April, but from now on, it will be done every year in January.

Revision of methods for the assessment of housing
Statistics Iceland has been reviewing methods for evaluating the cost of owner occupied housing (imputed rent) in the consumer price index for some time. With better house rent data, grounds have been created to change the method. Statistics Iceland believes that the rental equivalent method now better reflects the purpose of the measurement, and the process will be implemented in the index in the spring months. The rental equivalents are based on a statistical model based on rental data. The final date for implementing the changes will be published next March, along with a working paper.


Further Information

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