Lilja says government has wasted two years on the economy

Progressive Party leader Lilja Dögg Alfreðsdóttir accused the government of failing to act on the economy and said Iceland had lost two important years, according to mbl.is.

Speaking at her party’s central committee meeting, Alfreðsdóttir said inflation was too high, at 5.9 per cent in October, while the Central Bank’s policy rate stood at 8 per cent. She said high inflation and interest rates were reducing living standards and future opportunities for families, young people seeking to buy homes and businesses considering hiring or investment.

Alfreðsdóttir said inflation was now higher than when Prime Minister Kristrún Frostadóttir’s government took office two years ago. She criticised the government for not acting decisively, adding that claiming to have a sledgehammer and taking countless selfies would not make things happen by themselves.

She also said the government had failed on economic policy and had caused harm, claiming that household, business and public debt had risen by tens of billions of krónur.

Alfreðsdóttir criticised the government’s 2027 budget proposal, saying it shifted costs to households through higher taxes and fees and the removal of interest relief. She said balancing the budget through sensible priorities was fundamentally different from simply passing the bill on to households.

She said she understood that party members wanted to see higher poll numbers, but added that what mattered was not only where the party stood now, but where it was headed and whether it had the staying power to get there.