Iceland has overtaken Norway as one of the most expensive countries in Europe, as the Icelandic króna hits rare highs against other currencies.
The strong performance of the króna means that everyday costs in Iceland — including food, accommodation, and services — are now higher than those in neighbouring Norway, a country long considered one of the world’s priciest destinations.
Experts warn the soaring value of Iceland’s currency could hurt the country’s key export industries, such as tourism, seafood, aluminium, and tech services. As Icelandic news agency report, there is a risk that export sectors will lose out in competition on international markets.
As the króna rises, Icelandic goods and services become more expensive for international buyers. Tourists, too, may think twice before booking holidays in Iceland, as it becomes less affordable compared to other destinations.
The strength of the currency is partly due to high interest rates and continued investment inflows, which have helped to fuel demand for the króna. Unless measures are taken to manage the situation, some fear Iceland’s economic balance could be affected, with growing pressure on businesses that rely heavily on foreign customers.