Denmark: Inflation decreases in February
Inflation came in at 0.8% in February, which was down from January’s 1.2%. Looking at the details of the release, food and non-alcoholic beverages prices dropped in February compared to the previous month; this drop was partly offset by a rebound in transport prices and a smaller year-on-year drop in prices for housing and utilities.
Accordingly, the trend pointed down, with annual average inflation coming in at 2.2% in February (January: 2.8%). Meanwhile, core inflation fell to 1.7% in February, from the previous month’s 2.5%.
Finally, consumer prices increased a seasonally adjusted 0.51% in February over the previous month, coming in below January’s 0.94% increase.
Average inflation will accelerate from current levels in the rest of 2024, as the high base of comparison gradually fades. Still, inflation should average around the ECB’s 2.0% target—which Denmark follows due to its currency peg to the euro.
Relatively low inflation, coupled with continued robust nominal wage growth, will contribute to a recovery in household purchasing power and, in turn, stronger private consumption growth in 2024.