Arion Bank forecasts 2027 Iceland inflation at 4.2% and rate cuts mid-year
Arion expects the Icelandic economy to be tougher, citing Middle East conflict risks, higher commodity prices, rising unemployment and tighter credit. Inflation is seen at 4.2% next year, with rate cuts pushed back to mid-year and the policy rate ending at 7% after a 1 percentage point fall next year.