Statistics says Iceland consumer prices are over 60% higher than European ones, leaving behind even Switzerland and Norway. Let’s take a look. A ready-to-eat sandwich at a supermarket may cost over $10, and a teabag-produced tea for one is around $4. A simple meal for two can make you leave $80-$100.
There is no single reason explaining the costly prices – rather, it’s a combination of the country’s political, economic, and geographical position. Below, we’re talking location and currency related issues.
The country almost touches the North Circle, so its climate isn’t suitable for a long growing season, and about 40% of food is imported – mainly from the UK, Germany, Norway and the USA. Logically, the import costs are transited to customers.
National currency strength
The local currency is also responsible for the high prices. Although after financial crisis in 2008 the króna plummeted, already since 2009 it showed a significant growth, being considered the world’s best performing currency in 2017. This means other major currencies’ purchasing power decreased, in comparison with Iceland’s.