31 December 2014

Report to the Government on inflation below limits

Central Bank of Iceland

The joint declaration issued by the Government and the Central Bank of Iceland on 27 March 2001 stipulated that, if inflation deviated by more than 1½% from the inflation target (currently 2½%), the Bank must submit a report to the Government stating the reasons for the deviation, the Bank’s planned response to it, and the length of time needed, in the Bank’s assessment, to bring inflation back to target.

According to measurements published by Statistics Iceland on 19 December 2014, twelve-month inflation in terms of the consumer price index (CPI) measured 0.8% in December. This is more than 1½ percentage points below the inflation target. In accordance with the provisions of the March 2001 joint declaration, the Governor of the Central Bank sent the Bank’s report to the Minister of Finance and Economic Affairs on29 December 2014.

See the report here:

Report to the government on inflation below limits. 29 December 2014.pdf