Inflation, in short, is when prices rise. Many Western economies target an inflation rate of around 2% per year.
In February, consumer prices – also known as inflation – rose by 4.8% compared to the previous year, according to figures from Statistics Denmark. This is the largest single-year increase since 1989.
According to Sydbank, inflation is equivalent to the average Danish family spending an additional 19,200 kroner per year.
Christensen, chief economist at Sydbank, wrote in an analysis based on the figures that the situation could worsen in the near future: “A few weeks ago, in our view, the labor shortage was the biggest threat to the economy. That has changed since the Russian invasion of Ukraine. Since then, the prices of energy, food and a number of other raw materials have risen sharply.”.
In addition to the significant rise in energy prices in recent years, costs such as increased shipping expenses are also significant. If a company has to pay more to ship a television to Denmark from China, it could ultimately mean a higher price for the television in stores.
For several years, Danish wages have risen faster than inflation, but this time it could be very different, meaning many Danes are facing a decline in wages.
According to figures released by Statistics Denmark, purchasing goods has become more expensive. In general, Statistics Denmark has divided consumption into two main categories:
The first category is goods that are mostly physical or tangible products, for example, a television, in addition to consumer goods such as food. For this category, inflation rose by up to 7%. The second category is called services, which includes, for example, the price per hour with a physiotherapist. The inflation rate for the services category rose by only 2.4%.
Source: TV2
