Inflation reaches 10.1%

The Consumer Price Index (CPI) increased by 10.1 percent in the past year, according to Statistics Faroe Islands’ latest quarterly CPI report from November 2022.

The CPI, which measures inflation as experienced by Faroese households in their daily living expenses, consists of 12 main categories of goods and services.

November’s 10.1 percent annual inflation rate is the highest rate in 40 years, going up from 8.8 percent in the previous quarterly CPI report from August.

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Food and non-alcoholic drinks make up the largest portion of the average Faroese household spending.

The annual price increase of 13.3 percent in this category has had the greatest overall effect on the CPI in the past year. This figure rose by almost 4 percent since the August CPI report.

Within the food category, butter, margarine and cooking oil have seen the highest price hikes, going up by 30 percent in the past year. Meat prices have increased by 17 percent.

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Prices of bread, cereals, milk, cheese and eggs have also risen significantly. Coffee, tea and cocoa now cost almost 20 percent more than a year ago. Prices of sweets and soft drinks have increased by a relatively modest 5 percent.

Households spent 18 percent more on heating fuels in November 2022 than in November 2021. Rent and fuels for household heating have the greatest effect on the CPI figure in the housing category.

The latest CPI report also reveals that mortgages have become more expensive. This is the first interest expense index increase in more than a decade. Electricity prices have remained unchanged in the past year.

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Read the Faroese version of this article here.

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