In November, 15,200 people were out of work in Iceland, representing 6.5% of the labour force—the highest level in four years. At the same time, inflation rose to 4.5%, which experts say could signal tougher months ahead for the economy.
Unemployment in November stood at 6.5%, including 7% among women and 6.1% among men. This is the highest level since early 2021.
Union leaders express concern
RÚV / Viðar Hákon Söruson
Vilhjálmur Birgisson, chairman of the Federation of Icelandic Workers (Starfsgreinasambandið, SGS), emphasised that rising unemployment is a serious issue for workers.
“Losing a job is one of the hardest things a person can face. Often just a few missed paychecks can lead to serious financial trouble,” he said. He also pointed out the pressure faced by companies in the fishing and heavy industry sectors, which affects the businesses that supply them.
Halla Gunnarsdóttir, chair of VR, highlighted that the simultaneous rise in unemployment and inflation could indicate so-called crisis inflation. Inflation in Iceland rose to 4.5% ahead of the holidays, up 0.8 percentage points from the previous month, marking the highest level since January.
RÚV / Bragi Valgeirsson
“When prices rise while unemployment also increases, it is a serious signal for the economy,” she said.
Halla stressed that swift government action is needed to curb inflation without worsening unemployment.
We need coordinated measures in monetary and fiscal policy and attention to the housing sector, which has the greatest impact on inflation. In addition, increases in local and public fees, such as electricity and heating, should be limited. This is a problem created domestically, and it can be addressed.
Both Vilhjálmur and Halla warned that rising unemployment and inflation suggest that Iceland’s economy may face tougher months ahead. They emphasised that a rapid government response is crucial to mitigate the impact on families and businesses.
Source: Ruv.is
