Driven by a post-pandemic tourism boom that has inflated housing and service costs, Iceland has overtaken Switzerland as the world’s most expensive nation.
Iceland has surpassed Switzerland to become the world’s most expensive country for the first time since 2018, according to calculations by the local white-collar trade union Viska. Utilizing data from Eurostat and the Icelandic central bank, Viska economist Vilhjalmur Hilmarsson revealed that Iceland’s price level now exceeds Switzerland’s by three percentage points.
The price surge is driven by a post-pandemic tourism boom, which has triggered severe inflation in services and housing. Local data shows Icelandic food prices exceed those of other Nordic nations by 44%, with dairy and eggs costing 75% more.
Warning of the country’s economic vulnerability, Hilmarsson noted that high costs are beginning to deter visitors, adding: “In the long run, Iceland is not building up productive sectors. We depend way too much on labor-intensive industries which will continuously create inflationary pressure. We need to foster more pillars.”
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