Iceland has become the world's most expensive country, surpassing Switzerland for the first time in several years, Bloomberg reports, citing calculations by Iceland's white-collar union, Viska.

According to the union's economist, Vilhjalmur Hilmarsson, the price level in Iceland is three percentage points higher than in Switzerland. The calculations are based on data from the European statistical agency Eurostat and the Central Bank of Iceland. According to Eurostat, the last time prices in Iceland exceeded those in Switzerland was in 2018.

Norway was among the top three most expensive countries in the world, Luxembourg took fourth place, and the United States and Ireland shared fifth place.

Economist Hilmarsson attributes the rise in prices to the post-pandemic tourism boom, which has become one of the main drivers of the country's economic recovery, but has also increased inflationary pressure.According to him, the tourism sector influences inflation in the service sector and contributes to wage growth, and has also had a noticeable impact on the housing market.

Hilmarsson also noted that Iceland's economy relies on labor-intensive industries that create persistent inflationary pressure, and the country needs to develop new sectors.

The current situation places Iceland at the center of a broader debate about how high-income countries can maintain living standards in the face of ever-increasing costs of services, housing, and everyday consumption.