Iceland has ousted Switzerland from its throne as the world's most expensive country, according to calculations by the Icelandic trade union Viska.

According to the economist Vilhjalmur Hilmarsson of Viskas, prices in Iceland are approximately 3 per cent higher than Swiss prices.

The calculations are based on data from Eurostat and the Central Bank of Iceland, Sedlabanki. The last time it was more expensive in Iceland than in Switzerland was in 2018, according to Eurostat.

According to Hilmarsson, a large part of the upward pressure on prices is due to the Icelandic economy largely revolving around tourism, which drives up service inflation and wages in the country.

High housing prices – also related to tourism – contribute too.

"We are far too dependent on labour-intensive industries that will continue to create inflationary pressure," says Hilmarsson.

Source: Aftonbladet-tt.se