We forecast a 0.4% rise in the CPI in April

We expect the consumer price index (CPI) to rise by 0.4% month-on-month in April, raising headline inflation to 3.3%, from 2.9% in March.


Islandsbanki Research has published a new inflation forecast.

Highlights

  • ·         We forecast a 0.4% rise in the CPI in April

  • ·         Headline inflation will rise to 3.3%

  • ·         Easter spike in airfares pushes upwards

  • ·         Imputed rent pushes downwards

  • ·         Inflation outlook has improved somewhat

  • ·         Inflation 2.9% in 2019 and 2.8% in 2020

We expect the consumer price index (CPI) to rise by 0.4% month-on-month in April,raising headline inflation to 3.3%, from 2.9% in March. The medium-term inflation outlook has improved somewhat since our last forecast, owing to the prospect of more favourable wage developments in 2019 and a slower rise in house prices than we had previously expected. Inflation looks set to average 3.4% in Q2/2019 and taper off thereafter. We expect it to measure 2.9% at the end of 2019 and 2.8% at the end of 2020.

Islandsbanki Research inflation forecast

Authors


Jón Bjarki Bentsson


Chief economist

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Bergþóra Baldursdóttir


Analyst

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