Experts and the Danish National Bank predict that inflation will reach 5% next year. High inflation has already cost Danish families tens of thousands of kroner and appears set to continue into next year, according to calculations by Danske Bank.
What is inflation?
Inflation is a sustained increase in the general price level; in other words, it means that the prices of goods and services generally rise so that the value of money decreases.
The opposite development, where money becomes more valuable, is called deflation. Both inflation and deflation—if they are particularly high—can have significant economic consequences for society.
The amount of additional cost to the average Danish family
If inflation were to occur in practice at the above rate, it would cost a Danish family of two adults and two children an additional 23,000 Danish kroner, according to figures released by Danske Bank.
Central banks typically aim to increase inflation by 2% annually, and the latest inflation figure shows that inflation rose by 10.1% in October compared to the same month last year.
An economist's opinion from Danske Bank
According to Louise Agerström Hansen, senior analyst and special economist at Danske Bank, as reported by TV2, there is no doubt that inflation is affecting a large number of Danes. So far, she estimates that many Danes have cut their spending in a way that they do not feel is affecting their quality of life much, but with the possibility of rising prices, you may have to cut back on some places that you can really feel in your daily life.
Price increases expected in the next three months
There are also further price increases in supermarkets on the way in the next three months, as shown by a survey conducted by TV 2 among supermarkets in Denmark.
High prices put supermarkets in a bind due to fierce competition in the Danish supermarket market, according to economist Louise Aggerström Hansen, so she believes the battle for customers will continue to occupy a large space because they really want to hold onto customers.
The rise means the economy is getting worse.
She points out that rising prices at some point mean that the economy will generally get worse, because Danes can no longer spend money in the same way they used to, which can lead to a surge in demand for expensive things and a general slowdown in the economy. This general slowdown is also necessary in order for prices to either rise moderately or even fall decisively, according to Louise Agerström Hansen.
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