Iceland­ic Eco­nom­ic Weekly: 2 May 2022

The CPI rose by 1.25% month-on-month in April, bringing the inflation rate to 7.2% compared to 6.7% in March.

Last week’s highlights

• The CPI rose by 1.25% month-on-month in April, bringing the inflation rate to 7.2%, compared with 6.7% in March. Inflation has not been higher in Iceland since May 2010. The increase between months was much larger than we expected, mainly due to higher than anticipated increases in international airfares and housing prices.
• Last week, the CBI published the results of its quarterly survey of market participants' expectations. Market participants expect 7.0% inflation in both the second and third quarter. Market participants expect policy rates to rise by 1 percentage point in Q2, with two meetings of the Monetary Policy Committee planned for the quarter (in May and June).
• Icelandair (investor presentation) and Marel (investor presentation) published earnings for Q1.

The week ahead

• We expect the MPC to raise the policy rate by 1 percentage point on Wednesday.
• Arion bank, Íslandsbanki and Landsbankinn will publish earnings next week.

Markets and Economic Overview

Icelandic Economic Weekly: 2 May 2022 (PDF)