Arion Bank believes Iceland may have become the world’s most expensive country, according to RÚV. The Icelandic króna has strengthened a great deal in recent months, and Konráð S. Gíslason, economist at the bank stated, “We’re getting closer and closer to all sorts of tolerance limits. There is, for example, a lack of labor in the country. A lack of housing is looming; there is a shortage of accommodation. And with the amazing strengthening of the króna in recent months, it’s only a fair question to ask whether Iceland is about to become sold out.”
A report by Íslandsbanki, published this morning, highlights how expensive Iceland has become:
Hotel rates were 10-32 percent more expensive in Reykjavík than in other Nordic capital cities in 2016, RÚV reports. Prices at restaurants in Iceland and for accommodation were 44 percent higher in 2015 than the European Union average; passenger transportation was 52 percent higher and alcoholic beverages 126 percent higher than the EU average. Despite the high prices and the strong, tourist numbers are predicted to rise to 2.3 million this year.
The exchange rate means that visitors from the UK who exchanged their pounds for Icelandic krónur in December of last year received 38 percent less for them than they would have the year before. Americans received 15 percent less than before for their US dollars, and those who exchanged Euros got 19 percent less. Still, the number of visitors from the UK went up by 31 percent last year.
Prices for leisure activities and cultural events in Iceland in 2015 were 38 percent higher than the EU average, 53 percent higher for clothing and shoes, and 33 percent higher for other retail. For example, a pair of Levi’s jeans costs ISK 17,595 (USD 161, EUR 152) in Iceland, but ISK 10,000 (USD 92, EUR 87) in countries such as Sweden, France and Finland. The jeans cost 39 percent more in Iceland than they do where they are the second most expensive, that is, in Switzerland.