Inflation up in Denmark due to high electricity prices
January’s inflation rate in Denmark was 1.2 percent, up by 0.5 percent from December 2023. High electricity prices have been blamed for the change.
New figures released by national agency Statistics Denmark on Monday morning show a 0.5 percent increase in inflation in the first month of this year can primarily be attributed to an in increase in the price of electricity.
In isolation, the increased cost of electricity had an upward effect of 0.6 percent on the consumer index.
That was balanced by falling prices for goods including clothing, shoes, furniture, and cars.
Although an increase in inflation can be seen as disappointing, the overall level remains low, senior economist with the Confederation of Danish Industry, Allan Sørensen, said in a written comment to news wire Ritzau.
“Consumers’ purchasing power was severely curtailed in 2022 during extremely high inflation, but the situation has now been reversed. What was lost is now being recovered and it’s going well,” he said.
“Inflation on goods has come down by a huge amount and there are falling prices in several areas. It’s service prices which are still rising a little too quickly. We are still seeing large price increases at places like restaurants and cultural experiences,” he said.
The new inflation data from Statistics Denmark come the day after an 8.8 percent payrise was agreed for public servants.
The salary increase is part of a new overenskomst or collective bargaining agreement between the government and trade unions for the state employees. The unions had reportedly targeted a 10 percent increase.
Due to inflation, the agreement will give an effective wage rise of around 3.5 percent, Finance Minister Nicolai Wammen said in announcing the deal on Sunday.
People who work for the state will get an increase of 5.9 percent from April 1st, with an additional increase next year.
Inflation could see an overall increase in 2024, Sydbank’s senior economist Søren Kristensen told Ritzau.
“We also have to say that the price increases from December to January were a little too high. But in our view it is also pleasing that consumer spending power is now growing solidly,” Sørensen said.
“That also increases the likelihood that the Danish economy will have a sound 2024,” he added.
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New figures released by national agency Statistics Denmark on Monday morning show a 0.5 percent increase in inflation in the first month of this year can primarily be attributed to an in increase in the price of electricity.
In isolation, the increased cost of electricity had an upward effect of 0.6 percent on the consumer index.
That was balanced by falling prices for goods including clothing, shoes, furniture, and cars.
Although an increase in inflation can be seen as disappointing, the overall level remains low, senior economist with the Confederation of Danish Industry, Allan Sørensen, said in a written comment to news wire Ritzau.
“Consumers’ purchasing power was severely curtailed in 2022 during extremely high inflation, but the situation has now been reversed. What was lost is now being recovered and it’s going well,” he said.
“Inflation on goods has come down by a huge amount and there are falling prices in several areas. It’s service prices which are still rising a little too quickly. We are still seeing large price increases at places like restaurants and cultural experiences,” he said.
The new inflation data from Statistics Denmark come the day after an 8.8 percent payrise was agreed for public servants.
The salary increase is part of a new overenskomst or collective bargaining agreement between the government and trade unions for the state employees. The unions had reportedly targeted a 10 percent increase.
Due to inflation, the agreement will give an effective wage rise of around 3.5 percent, Finance Minister Nicolai Wammen said in announcing the deal on Sunday.
People who work for the state will get an increase of 5.9 percent from April 1st, with an additional increase next year.
Inflation could see an overall increase in 2024, Sydbank’s senior economist Søren Kristensen told Ritzau.
“We also have to say that the price increases from December to January were a little too high. But in our view it is also pleasing that consumer spending power is now growing solidly,” Sørensen said.
“That also increases the likelihood that the Danish economy will have a sound 2024,” he added.
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