Verðlækkunin er lítil.

Verðlækkunin is made up of three parts:

• verð = price
• lækkun = reduction / lowering
• -in = the (the definite article attached to the end of the noun)

So verðlækkunin literally means the price reduction or the lowering of the price.

In Icelandic, the definite article is usually added as a suffix to the noun rather than written as a separate word.

So instead of a separate word like English the, Icelandic often does this:

• verðlækkun = price reduction
• verðlækkunin = the price reduction

This is a very common feature of Icelandic nouns.

Because lítil has to agree with verðlækkunin in gender, number, and case.

Here, verðlækkunin is:

• feminine
• singular
• nominative

So the adjective must also be feminine singular nominative:

• masculine: lítill
• feminine: lítil
• neuter: lítið

That is why lítil is correct here.

You usually learn the gender as part of the noun. Icelandic nouns belong to one of three grammatical genders:

• masculine
• feminine
• neuter

Verðlækkun is a feminine noun, so words that describe it must match that gender.

This is something learners often need to memorize with each new noun.

Er means is. It is the present tense of the verb að vera = to be.

So:

• Verðlækkunin = the price reduction
• er = is
• lítil = small / little

Together: The price reduction is small.

Because here lítil is used as a predicate adjective, not directly before a noun.

Compare:

• lítil verðlækkun = a small price reduction

  • here the adjective comes before the noun

• Verðlækkunin er lítil = The price reduction is small

  • here the adjective comes after er and describes the subject

This works much like English The reduction is small.

It is in the nominative case, because it is the subject of the sentence.

In a basic sentence like X er Y (X is Y), the subject is normally in the nominative. So here:

• Verðlækkunin = nominative subject
• lítil also appears in nominative form to match it

Possibly, depending on context, but more literally verðlækkun means price reduction or price decrease.

If a store lowers a price, English might naturally say:

• The price reduction is small
• The discount is small

So the exact English translation can depend on the situation, even though the Icelandic word is specifically built from price + lowering/reduction.

A rough guide for English speakers is:

VERTH-laihk-ku-nin

A few helpful notes:

• ð is like the th in this
• æ sounds roughly like eye
• stress in Icelandic usually falls on the first syllable

So the main stress is on VERÐ-.

A rough pronunciation is:

LEE-ti(l)

Some notes:

• í is a long ee sound
• the first syllable is stressed: LÍ-
• the final l may sound lighter than an English l, depending on speaker and dialect

This is the most neutral and common word order:

• Verðlækkunin er lítil.

It follows a basic pattern:

• subject + verb + adjective/complement

Icelandic word order can vary more than English in some contexts, but this is the standard straightforward form a learner should expect first.

The indefinite version would be:

• Verðlækkun er lítil.

That would mean A price reduction is small or Price reduction is small, though in natural usage it may sound a bit odd without context.

The important difference is:

• verðlækkun = a price reduction
• verðlækkunin = the price reduction

These are different gender forms of the same adjective, meaning small / little.

In the nominative singular:

• lítill = masculine
• lítil = feminine
• lítið = neuter

Examples:

• bíllinn er lítill = the car is small
  (bíll is masculine)

• verðlækkunin er lítil = the price reduction is small
  (verðlækkun is feminine)

• húsið er lítið = the house is small
  (hús is neuter)

Icelandic does not usually have an indefinite article like English a/an.

So:

• verðlækkun can mean a price reduction
• verðlækkunin means the price reduction

In other words:

• indefinite meaning often has no article
• definite meaning is often shown by the suffix article

That is a major difference from English.