New data from Eurostat has revealed that the subarctic island of Iceland is now the most expensive country in Europe for consumers, with prices 56% higher on average than anywhere else in the continent in 2018. While most people would be happy to relax in the island’s natural hot thermal springs, they won’t be anywhere near as calm when they see the cost of their food and hotel bills in the Land of Fire and Ice.
Iceland ranks as the most expensive European nation for consumers, with Switzerland coming a close second, with prices 52% higher on average than elsewhere in Europe. This was followed by two more Scandinavian nations in Norway (48%) and Denmark (38%). For example, an average Icelandic restaurant will charge around €85 for a dinner for two, which some European residents would consider to be an extortionate sum of money.
Consumer price comparison platform, Numbeo, also found that the average price of a bottle of wine is priced at €17, while a dozen eggs can cost as much as €5. But just how can an island with a population of only 355,000 justify such high consumer prices? Put simply, the island’s reliance on imported produce – and its high taxation policy on alcohol – all help to partly explain those costs.
Konrad Gudjonsson, the chief economist of the Iceland Chamber of Commerce, also admitted that Iceland struggles to achieve the “same economies of scale” as nations that are “100 times larger”. However, Gudjonsson also suggested there is a direct connection between how “expensive” a country is and its “standard of living”.
Latest data from Statistics Iceland reveals that the average monthly wage for Icelandic full-time employees last year – before tax – was €4,450. As Breki Karlsson, chairman of the Consumers’ Association of Iceland, rightly points out, consumer prices must “take into account the level of wages” in the country. Considering Iceland has one of the highest average wages in Europe, it shouldn’t be a surprise to see costs follow suit.
There’s no denying that the cost of living is something of a shell-shock to most tourists arriving in Iceland. Nevertheless, the natural beauty and history that oozes from every pore is Iceland’s saviour; more than making up for its expensive tastes. The capital city of Reykjavik is said to house some of the oldest artefacts of human habitation on the island, dating back as far as AD 871. The city’s Settlement Exhibition is a homage to the Viking age, based around the discovery of a 10th century Viking longhouse.
The Blue Lagoon is the country’s best-known tourist attraction. The natural geothermal spa is a haven for both tourists and locals alike. Taking a dip in this water has to be seen to be believed. It’s almost milky in texture and is rich in minerals and good bacteria, offering a wealth of healing properties for the body and mind. Those that prefer a quieter pace of life can venture to the Eastfjords, where there are breath-taking cliff edges aplenty and a host of small, humble towns and villages oozing with incredible wildlife.
Finally, the geological wonder that is Akureyri continues to draw in visitors from all over the world. Lake Myvatn is a series of lakes that formed together following a number of volcanic eruptions more than 2,000 years ago. The majestic waters, the unique rock formations and the plethora of bird species that flock here in the summer months makes this trip wholly worthwhile.
Although Iceland might leave a dent in your wallet, it’s well worth your time – and money.