Iceland heads for government change as voters demand action on cost of living crisis

Iceland held a snap election on November 30, with voters likely set to oust the ruling coalition amid growing concerns over the country's escalating cost of living crisis. 

While snowstorms across the eastern region of the island posed challenges to voters and may delay the tallying of ballots, the election is expected to bring about significant political change, Caliber.Az reports via foreign media.

Iceland, with a population of just 384,000, has maintained political stability since 2017, becoming one of Europe's wealthiest countries per capita, thanks to its thriving tourism industry, fisheries, and energy sector, particularly its geothermal and hydroelectric-powered aluminium production. However, rising inflation and borrowing costs, now at their highest levels since the 2008 financial crisis, have led to a slowdown in the economy, worsening living conditions for many Icelanders.

The country has also been hit by a series of volcanic eruptions near the capital Reykjavik, which displaced thousands and led to costly infrastructure repairs, further dampening tourism—a key contributor to the economy.

Voting began at 0900 GMT and was set to end at 2200 GMT, with the final result expected on December 1 morning. However, adverse weather conditions in the eastern part of the country may delay vote counting. Authorities had encouraged voters to cast their ballots early to avoid disruptions.

Ahead of the election, polls suggested that the ruling coalition — which includes the Left-Green Movement, the conservative Independence Party, and the centre-right Progressive Party — could be ousted after seven years in power. Political experts noted a clear desire for change among the electorate.

"We've had the same coalition for seven years, and there seems to be a desire now for new people in government," said Stefania Oskarsdottir, a political scientist at the University of Iceland.

In April, Prime Minister Katrín Jakobsdóttir of the Left-Green Movement resigned to run for the presidency but lost the bid. Her successor, Bjarni Benediktsson of the Independence Party, dissolved parliament in October and called for the election after rising tensions within the coalition over issues such as migration, energy, and housing.

The country's population has grown by 20% in the last decade — the most significant increase among OECD nations — largely driven by high immigration rates, which have placed additional pressure on housing and healthcare systems.

While inflation and interest rates have recently shown signs of easing, the cost of living crisis remains a central issue, and the debate over EU membership has resurfaced. Polls indicate that the pro-EU Social Democrats and the Liberal Reform Party could secure 40% of the vote if they form a coalition.

The centre-left Social Democratic Alliance, which governed between 2009 and 2013, is expected to secure just over 20% of the vote, followed by the centre-right Liberal Reform Party.

"The biggest issue right now is the cost of living," said Kristrún Frostadóttir, leader of the Social Democrats. The 36-year-old economist, who has led her party for two years, is a strong contender to become Iceland’s next prime minister, championing the Nordic welfare model and advocating for policies aimed at easing economic hardships.

By Tamilla Hasanova