• Danish inflation accelerates above expectations in January, likely to average 1.4 pct in 2019

    Source: FxWire Pro - Commentary / 11 Feb 2019 06:49:22   America/New_York

    Denmark’s inflation came in higher than anticipated. On a sequential basis, the consumer price inflation index rose 0.2 percent. This is the first monthly rise in January since 2012. Normally, consumer prices fall in the month because of traditional seasonal sales on several goods. The rise in the month-on-month inflation in January was the first since 2012.

    Compared to previous month, food and non-alcoholic beverages, especially, contributed positively to the headline figure, adding 0.16 percentage points to the sequential change. Recreation and culture contributed 0.15 percentage point, owing to increased prices of toys after Christmas sales. Meanwhile, the usual January sales of clothing and footwear negatively contributed 0.32 percentage point.

    On a year-on-year basis, Danish inflation accelerated to 1.3 percent after three straight months of being at 0.8 percent. The acceleration was mainly due to a big rise in prices of goods as prices of food and heat energy rose. Goods inflation came in at 1 percent, the highest level since December 2012.

    The annual rise in January was widespread as all sub-categories except communication contributed positively to the headline figure. Housing continues to be a main contributor as it accounted for 0.44 percentage point of the total rise in the year-on-year inflation. Due to a higher net price index, a higher annual change in housing rents is expected in 2019 compared to 2018, noted Nordea Bank.

    Danish inflation is likely to move higher a bit for the remainder of 2019, reaching an average of about 1.4 percent.

    “In the coming months the expected increase will mainly stem from prices of food where the negative base effect will disappear. Also, higher rents on housing are expected to lift Danish inflation, starting next month”, added Nordea Bank.

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