• 1 day ago

A tourism boom has made Iceland the most expensive country in the world.

Iceland has once again become the most expensive country in the world, surpassing Switzerland in price levels. This was reported by Bloomberg, citing calculations by the Viska trade union for non-profit workers, based on data from Eurostat and the country's central bank.

According to Viska economist Vilhjalmur Hilmarsson, prices in Iceland are currently approximately three percentage points higher than in Switzerland. Iceland last topped this ranking in 2018.

Experts attribute the rise in prices to the tourism boom that followed the pandemic and has become a key factor in the economic recovery. According to Hilmarsson, the growth of tourism is driving up the cost of services, driving up wages, and impacting the housing market. Competition between locals and tourists for short-term rental properties is creating additional pressure.

According to published data, groceries in Iceland are 44% more expensive than in other Nordic countries. Dairy and egg prices are 75% higher than average, while meat prices are 71% higher. Beverage prices also remain high: a pint of beer can cost up to ISK 1,800 (EUR 12.57), while a cup of coffee in a café can cost up to ISK 1,000 (EUR 6.98).

Amid rising prices, tourism organizations are recording the first signs of a decline in interest in traveling to the country. Economists warn that the economy's heavy dependence on labor-intensive industries, primarily tourism, could continue to fuel inflationary pressure.