Statistics Iceland shall compute and publish an index showing changes in the price levels of private consumption. This index shall be called the Consumer Price Index. The Index shall be compiled on a base determined by Statistics Iceland according to the results of a household budget survey.

A committee composed of one member nominated by the Supreme Court of Iceland, one nominated by the Icelandic Federation of Labour and one nominated by the Confederation of Icelandic Employers shall act as an advisory body to Statistics Iceland in producing the index and shall monitor its regular compilation. Costs incurred by the committee shall be paid from the State Treasury.

At an interval of no more than five years, Statistics Iceland shall make a special survey of household expenditures, a household budget survey. It shall encompass private households irrespective of their place of residence, family type, occupation and economic activity and shall include every type of household expenditure. Upon completing the processing of the survey, Statistics Iceland shall rebase the Consumer Price Index in accordance with the survey results and other data collected specifically for this purpose. Statistics Iceland shall publicly give an account of this survey and its results, as well as of how the results are utilised for forming a new index base.

The Consumer Price Index shall be compiled every month on the basis of prices during at least one week around the middle of each month. If prices of goods and services are subject to frequent changes, price data may be collected over a longer period. If information on current prices or price changes is not available or not relevant Statistics Iceland may utilise average prices of one or more months as applicable. Insofar as possible, the index shall reflect average prices in Iceland.

The present Act shall enter into force on 1 March 1995.