Denmark's finance ministry expects inflation to ease in 2023
Next year could see the end of extraordinarily high prices which have become prevalent on Denmark’s consumer market in 2022, according to an updated forecast from the country’s Ministry of Finance.
A new economic forecast published by Denmark’s Ministry of Finance on Thursday predicts lower inflation next year, but notes that a potential switching off by Russia of gas supplies to Europe could complicate the outlook.
Inflation is expected to end at 3.3 percent in 2023, significantly lower than the current level of 8.7 percent.
The prognosis is based on an expectation that oil and gas prices next year will not go above the highest level so far recorded in 2022.
But a significant degree of uncertainty must be attached to this prediction, according to a summary published by the ministry.
“These are very uncertain assessments and the margin of error is broad,” the summary states.
Finance ministry economists have also produced a hypothetical ‘risk scenario’ in which Russia turns off gas supplies to Europe.
In that scenario, inflation is predicted to reach 4.3 percent. Additionally, employment would fall by 28,400 compared to the original estimate of 7,900. The economy would meanwhile shrink by 0.4 percent instead of a predicted growth of 0.8 percent.
An uncertainty factor is calculated into the hypothetical risk scenario, assuming that consumers and businesses would be more hesitant to spend and invest because of the unstable economic situation.
READ ALSO: What is in Denmark’s draft 2023 budget?
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A new economic forecast published by Denmark’s Ministry of Finance on Thursday predicts lower inflation next year, but notes that a potential switching off by Russia of gas supplies to Europe could complicate the outlook.
Inflation is expected to end at 3.3 percent in 2023, significantly lower than the current level of 8.7 percent.
The prognosis is based on an expectation that oil and gas prices next year will not go above the highest level so far recorded in 2022.
But a significant degree of uncertainty must be attached to this prediction, according to a summary published by the ministry.
“These are very uncertain assessments and the margin of error is broad,” the summary states.
Finance ministry economists have also produced a hypothetical ‘risk scenario’ in which Russia turns off gas supplies to Europe.
In that scenario, inflation is predicted to reach 4.3 percent. Additionally, employment would fall by 28,400 compared to the original estimate of 7,900. The economy would meanwhile shrink by 0.4 percent instead of a predicted growth of 0.8 percent.
An uncertainty factor is calculated into the hypothetical risk scenario, assuming that consumers and businesses would be more hesitant to spend and invest because of the unstable economic situation.
READ ALSO: What is in Denmark’s draft 2023 budget?
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