The near-term inflation outlook is positive, owing to a stable króna, expectations of modest wage rises, and a well-balanced housing market. We project that inflation will be below the CBI’s target through end-2020 and then inch slightly above target in 2021. Statistics Iceland (SI) will publish the CPI for January at 9:00 hrs. on 30 January.
Seasonal sales make their mark on measurements
January will feature the usual tug-of-war between price list hikes and increased public levies, on the one hand, and post-holiday sales, on the other. According to our forecast, the effect of seasonal sales will weigh heavier this month, with clothing and footwear prices falling by 10% (-0.45% CPI effect), and furniture and housewares falling 5.5% (-0.30%).