Verðvísitala

Verðvísitala, also known as the Icelandic Consumer Price Index (CPI), is an economic indicator used to measure the average change over time in the prices paid by consumers for a fixed basket of goods and services. It provides a key measure of inflation within Iceland and serves as a vital tool for policymakers, economists, and analysts to assess price stability and cost of living trends.

The index is compiled periodically, typically monthly, by Statistics Iceland (Hagstofa Íslands), which collects price data on a wide range of products and services, including food, housing, transportation, healthcare, education, and leisure. The basket of goods and services reflects typical consumer expenditure patterns based on household surveys.

Verðvísitala serves multiple purposes. It is used to adjust wages, pensions, and social benefits to maintain purchasing power. Additionally, it influences monetary policy decisions, guiding the Central Bank of Iceland in setting interest rates to control inflation. A rising verðvísitala indicates inflationary pressures, whereas a declining index suggests deflation or decreasing prices.

The index is expressed as an index number with a reference base year, often set to a specific year for comparison. Changes in the index over time reflect shifts in consumer prices, providing insights into economic stability and cost-of-living adjustments.

Overall, verðvísitala is a fundamental statistic in Iceland's economic landscape, contributing to informed decision-making by government entities, businesses, and consumers.