Newly published data from the Central Bank (CBI) show that Icelanders used their payment cards to the tune of nearly ISK 141bn in November, an increase of 10.6% year-on-year in ISK terms. In price- and exchange rate-adjusted terms, the real increase measured 8% YoY. As before, turnover is driven mainly by card use abroad, which grew by 18% YoY in real terms, while card use in Iceland increased as well over the same period, by just over 5%.
Continued growth in payment card turnover
Payment card turnover grew in real terms in November, both within Iceland and overseas. Overseas turnover was particularly strong, as Icelanders have been travelling abroad in large numbers this year. Households’ strong position looks set to support private consumption growth in the coming term.
Icelanders’ overseas travel poised to hit record high in 2025
Card turnover abroad has skyrocketed, with YoY growth in the double digits every month in the recent past. Overseas card turnover stems from spending during travel abroad and shopping with foreign online merchants. Nevertheless, the vast majority of the total is due to consumption while travelling, as foreign e-commerce accounts for less than 10%.
Icelanders have been travelling in droves recently, and all signs suggest that 2025 will be a record year for overseas travel. According to the Icelandic Tourist Board, Icelandic nationals’ trips abroad were up 18% YoY in the first eleven months of the year. In 2018, the strongest year on record, Icelanders’ departures from Keflavík Airport totalled 688,000, while the total for 2025 through November is already up to 655,000, with December figures still pending.
Card turnover balance negative
Foreign tourists’ spending while in Iceland has shrunk concurrent with the surge in Icelanders’ consumption abroad. This comes as no surprise, given this winter’s YoY decline in visitor numbers after a robust peak season, as we have discussed recently.
The card turnover balance is therefore negative, as it has been for the past two months. In November, foreign turnover with domestic payment cards totalled just over ISK 34bn, while foreign card use in Iceland came to only ISK 19bn. Total turnover with foreign cards was down 8% relative to the same period in 2024. The payment card turnover balance is therefore negative by just over ISK 15bn, the largest deficit since measurements were introduced.
Households open their wallets wide
Private consumption is quite brisk at present. Statistics Iceland (SI) published national accounts data for Q3/2025 in November, and according to preliminary figures, private consumption grew in real terms by just over 4% YoY. It grew by 3.6% YoY in the first nine months of 2025, as compared with a scant percentage point in each of the two years beforehand. This shift is even more interesting because of the slowdown in population growth year-to-date.
According to the most recent payment card turnover figures, private consumption is likely to be strong in Q4 as well. In our macroeconomic forecast from this autumn, we projected private consumption growth at 3.1%, and the forecast published by the CBI in November was broadly similar to ours. The most recent data imply that growth could slightly exceed these forecasts in 2025 as a whole.
Clearly, households are well positioned overall and have been opening their wallets more readily than in the past. New registrations of motor vehicles to individuals have surged, for instance, after contracting in 2024. Real wages look set to keep rising, and households are saving at a good clip, which will support demand in the coming term. As a result, we expect private consumption to keep growing in coming years, by 2.8% in 2026 and 2.7% in 2027.
