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Denmark Inflation hits highest level in 13 years on energy costs
Prices on goods jumped 6.6%, the biggest year-on-year increase for any month since 1985.
Denmark’s inflation rate jumped to its highest level since 2008 on rising energy costs, suggesting added pressure on wages as the country already struggles with a lack of workers.
Consumer prices rose 4.3% in January from a year earlier, Statistics Denmark said in a statement on Thursday. Prices on goods jumped 6.6%, the biggest year-on-year increase for any month since 1985. The uptick was driven by price hikes on electricity and gasoline, with core inflation excluding energy rising by 1.9%.
While the energy-driven surge in inflation is also hitting consumers elsewhere in Europe, Denmark is also facing concerns about labor shortages worsening wage pressures and potentially eroding competitiveness, even as the Nordic economy has been among the most resilient to the pandemic.
Palle Sorensen, chief economist at Nykredit, said higher fees on cigarettes and rising costs for businesses could push inflation rate higher even when temporary effects, like low energy prices in the beginning of 2021, will fade.
“It’s obvious that rising inflation and the record-high pressure on the labor market will drive up wages during the year, which could make inflation more persistent in Denmark,” he said in a note to clients.
