The CPI based on prices in December 2008 is 332.9 points (May 1988=100), 1.52% higher than in the previous month. The CPI less housing cost is 303.4 points, 1.71% higher than in November.

Prices of furniture and household equipment increased 4.4% (effect on the index 0.31%) and prices of material for housing maintenance 7.2% (0.31%). Prices of food and beverages rose by 2.1% (0.27%) and prices of alcoholic beverages by 9.2% (0.15%), partly owing to an increase in specific alcohol tax. Prices of recreational goods increased 2.4% (0.28%) and international flight fares 14.6% (0.17%).

Prices of petrol and diesel oil decreased 8.6% (-0.39%), despite increase in taxes on fuels. Cost of owner occupied housing decreased 0.5% (-0.07%), thereof the effect of lower market prices was -0.04% and of lower real interest rate -0.03%, a decline for the first time since November 2005.

The Constant tax CPI was not updated now. The reason is the short time given to measure the effect of changes in specific taxes on alcohol-, tobacco- and fuels together with changes in excise tax (ad valorem) on cars and fuels, stipulated by change in law on the 11th of December. Statistics Iceland intends to publish it again at the same time as the January 2009 CPI.

The CPI in December 2008 is 18.1% higher than in December 2007 while the CPI less housing cost is 20.7% higher than one year ago. Over the last three months, the CPI has increased 5.5%, equivalent to an annual inflation rate of 24.0% (29.7% for the CPI less housing cost).

The average of the CPI in year 2008 was 307.7 points, 12.4% higher than the 2007 year’s average. Similar rise was 5.0% in 2007 and 6.8% in year 2006.

The CPI less housing cost was on average 276.8 points in year 2008, 12.2% higher than in 2007. Similar rise was 2.5% in year 2007 and 4.8% in year 2006.

The CPI compiled at the middle of December, 332.9 points, is applicable for indexation purposes in February 2009. The old credit terms index for February 2009 is 6,573 points.

Statistics