The Consumer Price Index (CPI) based on prices in January 2026, is 668.3 points (May 1988=100), 0.38% higher than in the previous month. The CPI less housing cost is 533.0 points, 0.38% higher than in December 2025.
Winter sales are ongoing and prices of clothing and footwear decreased by 7.4% (effect on the index -0.27%) and prices of furnishings, household equipment etc. by 5.4% (-0.23%). Morover, prices of international airfares decreased by 10.8% (-0.27%) while food and non-alcoholic beverages prices increased by 1.0% (0.15%).
At the turn of the year, various changes related to vehicles were implemented that affected the CPI. Oil tax and excise duties on fuel were abolished while carbon tax was increased. Kilometer-fee was introduced for all vehicles, excise duties on vehicles were modified and the electric vehicle subsidy was reduced.
Petrol price decreased by 27.4% (effect on the index -0.68%) and diesel price by 24.2% (-0.26%). Toll facilities increased by 633.4% (0.99%) and prices for cars increased by 13.3% (0.56%). Thereof was an increase in prices of electric cars by 6.4%, of hybrid cars by 16.3% and of petrol and diesel cars by 19.8%.
The CPI is 5.2% higher in January 2026 than in January 2025 and the CPI less housing cost is 4.5% higher than one year ago.
The CPI compiled in the middle of January 2026, 668.3 points, is applicable for indexation purposes in March 2026.
Base update and transition to COICOP 2018
The Consumer Price Index (CPI) for January is calculated on a new base, December 2025, and is based on the results of Statistics Iceland’s Household expenditure survey for 2022–2024, along with other consolidating data.
Consumption weights are examined over a three-year period in order to capture long-term trends while at the same time reducing short-term volatility in the results. If newer data indicate a permanent change, efforts are made to take that into account. The clearest example of this is probably compulsory school meals, which are now provided free of charge and therefore carry no weight, even though households paid for them during the period covered by the expenditure survey. Further information on the base update can be found in a memorandum at the bottom of this release.
The CPI is now published according to the COICOP 2018 classification system, which is a new version of the system previously used to classify consumption expenditures. General users of the index itself will not notice any difference, but new tables have been published for sub-indices and analytical indices where some changes were made to the subdivision into subcategories. Further information on the changes can be found under a link below.
Memorandum about Base update 2026
New version of the classification system in the CPI