neyssluverðsvísitala

Neyssluverðsvísitala, also known as the Consumer Price Index (CPI), is a statistical measure that tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is widely used to measure inflation and adjust wages, benefits, and other economic indicators for changes in the cost of living.

The CPI is calculated by the Statistics Iceland (Samkeppniseftirlit Íslands) and is based on a representative sample of households. The index is constructed using a fixed basket of goods and services, which includes items such as food, housing, clothing, transportation, and medical care. The prices of these items are collected from a network of retail stores and service providers across the country.

The CPI is typically reported on a monthly basis and is used to calculate the annual inflation rate. This rate is a key indicator of economic health and is used by policymakers to set monetary policy and adjust government programs. For example, if the CPI increases by 5% over a year, it indicates that the average cost of goods and services has risen by 5%, and wages and benefits may need to be adjusted to maintain their purchasing power.

In Iceland, the CPI is used to adjust various social welfare benefits, such as pensions and disability benefits, to ensure that they keep pace with changes in the cost of living. It is also used to monitor the impact of economic policies on the cost of living and to inform public debate on economic issues.

The CPI is an important tool for understanding the economic well-being of consumers and the overall health of the economy. It provides valuable insights into the factors driving inflation and helps policymakers to make informed decisions about economic policy.