Danish consumer prices dropped in January for the first time in 60 years, but the fall didn’t last long.
Figures released by Statistics Denmark on Tuesday showed that the national price of goods and services increased 0.2 percent in February 2015 compared to the same month last year.
Largely due to plummeting global oil prices, January’s historic fall in consumer prices raised hopes it could boost Denmark's anaemic consumer spending.
Although prices on the whole were up in February, the continued relatively low price of energy helped keep inflation in check. Without the cost of energy and non-processed food, prices would have rose 0.9 percent over February 2013.
Economist Lone Kjærgaard told TV2 that Danish consumers should take advantage of the price standstill.
“As a consumer, one should take advantage of the favorable conditions here and now: One’s salary increases while the prices of daily goods is standing still. There is much to indicate that this will not continue,” she said.
Last month, Handelsbanken economist Jes Asmussen also predicted that January’s deflation was unlikely to last.
"Looking at the trends in the price of services, wages, house prices and consumer expectations for inflation in Denmark, there is nothing to suggest that the Danish economy is about to be caught in a vicious deflationary spiral," he said according to business daily Børsen.
Danish consumers have largely reined in spending since housing prices began a protracted slide in 2007, leaving the country with one of the world's highest levels of household debt.