Iceland Observer: 50skills Raises $6M, Inflation Hits 5.9%, and U.S. Expands Greenland Access

MarketVector™ Iceland Global Index (MVISLG) Returns:

1W: (0.45)% 1M: (3.53)% 1Y: (4.96)% Inception 12/31/20: 30.99%

M&A / PE / VC

50skills Raises $6 Million

Reykjavík-founded HR technology company 50skills raised ISK 729 million, or roughly $6.1 million, in a financing round to expand its AI-based employee workflow platform. The round was co-led by Frumtak Ventures, Swiss Post Ventures, Avant and U.S. family office DRD Investments. The company said the funding will support product development and international expansion.

Blue Lagoon Merger Targets Future Listing

New reporting on the planned merger between Blue Lagoon and Arctic Adventures says the combined company is being structured partly around a future stock market listing. The merger would also broaden Blue Lagoon’s operations beyond the volcanically active Svartsengi area. Kólfur, owned by Blue Lagoon founder and chairman Grímur Sæmundsen, is expected to become the largest individual shareholder with about 19.4%.

Renewable Energy & Industry

Landsvirkjun Launches Búrfell Upgrade

Landsvirkjun selected Austria’s Andritz Hydro for a major modernization of the Búrfell hydroelectric station, including replacement of four generator stators. The overall project is expected to cost about ISK 2.3 billion, or roughly $19.2 million. The work is scheduled to be completed during the first half of 2030.

Corporate & Market News

Isavia EBITDA Falls

Isavia reported first-half revenue of ISK 20.3 billion, or roughly $169.1 million, while EBITDA fell to ISK 3.34 billion, or roughly $27.8 million, from ISK 4.25 billion, or roughly $35.4 million, a year earlier. Net profit was ISK 441 million, or roughly $3.7 million. Investment in property, equipment and intangible assets reached ISK 5.66 billion, or roughly $47.2 million.

Kvika Names New CEO

Kvika Bank appointed Jón Birgir Jónsson as its new chief executive. He will take over from Ármann Þorvaldsson on December 1. Kvika highlighted Jón Birgir’s management experience and international connections in announcing the appointment.

Policy & Central Bank

Central Bank Increases FX Purchases

The Central Bank increased its regular foreign currency purchases in September as the króna strengthened and the euro fell below ISK 140. The Bank restarted regular purchases in May and increased them again on September 11. Local market reporting linked the stronger króna partly to export conditions and foreign investment in Icelandic government bonds.

Collective Agreements Face October Test

The Federation of General and Special Workers is pressing the government to limit increases in public tariffs and fees after municipalities agreed to cap relevant tariff increases at 2.5% for 2027. Unions face an October 8 decision on whether conditions justify terminating existing collective agreements. Labor representatives have also discussed allowing the agreements to expire four months early if inflation has not fallen to 3.5% by September 2027.

Central Bank Keeps Capital Buffer at 2.5%

The Central Bank’s Financial Stability Committee kept the countercyclical capital buffer unchanged at 2.5%. The Bank said real house prices have fallen, housing supply has increased and construction firms are being tested by high interest rates and high months of inventory. It also warned that AI is increasing the speed and complexity of cyber risk for financial firms.

Economic Indicators

Inflation Rises to 5.9%

Annual inflation increased to 5.9% in September from 5.6% in August, its highest level since August 2024. The CPI increased 0.39% month over month, while inflation excluding housing reached 5.7%. The expiration of the temporary VAT reduction on fuel, which returned the rate from 11% to 24%, contributed to the increase.

August Trade Deficit Widens

Iceland posted an August goods trade deficit of ISK 63.1 billion, or roughly $525.8 million, compared with ISK 33.6 billion a year earlier. Exports rose 8% year over year to ISK 72.4 billion, or roughly $603.3 million, helped by aluminum and other manufacturing goods. Imports rose 35% to ISK 135.5 billion, or roughly $1.13 billion, mainly because of fuels, capital goods and industrial supplies.

August Unemployment Rises to 6.8%

Seasonally adjusted unemployment rose to 6.8% in August, with about 15,900 people unemployed. The employment rate was 73.7% and the activity rate was 79.0%. Compared with August 2025, unemployment was up 0.7 percentage points and the employment rate was down 3.6 percentage points.

International & Geopolitical

Arctic Investments Conference Adds New Speakers

BBA//Fjeldco and Arion Bank added new speakers to the fifth annual Arctic Investments Conference, scheduled for November 5 in London. The updated lineup includes Icelandic Prime Minister Kristrún Frostadóttir, Melanie Nadeau, CEO of Cove, and Guðmundur Daði Rúnarsson, CEO of Icelandic infrastructure company Tunnel & Bridge. This year’s conference will focus on investment projects across energy, infrastructure, tourism and the blue economy, with the final agenda still to be announced.

U.S. Expands Military Access in Greenland

The United States, Denmark and Greenland signed a new security agreement in September that provides for additional U.S. military activity at Narsarsuaq and Mestersvig alongside the existing Pituffik Space Base. The agreement builds on the existing U.S.-Danish defense framework and is intended to expand NATO’s presence in the Arctic. The agreement still requires parliamentary approval in Denmark and Greenland.