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.

Denmark's finance ministry expects inflation to ease in 2023
Denmark's finance ministry has published a new projection for the economy in 2023. Photo: Philip Davali/Ritzau Scanpix

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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Denmark triples Christmas charity aid to help with price increases

A charity fund distributed by organisations to vulnerable families at Christmas has been tripled by the Danish government in response to high food prices.

Denmark triples Christmas charity aid to help with price increases

The fund for Christmas 2022 has been raised by the government, with the broad backing of parliament, from 5 million kroner to 15 million kroner, the Ministry for Social and Elderly Care said in a statement.

“Christmas can be difficult for families in a financial bind. With increasing prices this year, is can feel completely insurmountable to also find the money for a Christmas duck and presents,” the Minister for Social and Elderly Care, Astrid Krag, said in a statement.

“Christmas Aid is a targeted helping hand for vulnerable families who get the chance to give their children a Christmas like their classmates with a present under the tree and Christmas food that’s a bit better than normal,” she said.

“I am therefore very pleased that we can triple Christmas Aid so the many financially stretched families can also celebrate Christmas,” she said.

Danish NGOs including the Danish Red Cross, Mødrehjælpen and the Danish Salvation Army are responsible for distributing the money.

READ ALSO: EXPLAINED: What’s causing the highest inflation rate in Denmark for almost 40 years?