In March, consumer prices rose by 1.5 percent - when compared with the corresponding month last year. This is shown by a statement from Statistics Denmark, which was published on Thursday morning. This means that inflation has taken a major step down, after it was calculated at 2.0 percent in February. The primary reason for the decline is that electricity prices have fallen between February and March, writes Statistics Denmark.
According to Tore Stramer, chief economist at the Confederation of Danish Enterprise, part of the explanation must also be found in lower gasoline prices. Regardless of the explanation, it is good news that inflation is falling in the midst of global unrest, he believes.
- It is clear, however, that consumer prices in Denmark can be affected by developments in the trade war with the United States, he writes in a comment.
- But right now there is no reason to expect a significant increase in inflation as a result of the trade war.
In the past week, economists have been talking about the risk of a recession after US President Donald Trump chose to impose higher tariffs on a wide range of countries. A recession is defined as a period of negative growth. On Wednesday, the president chose to put his tariff plans on hold for 90 days.
This happened because many countries - according to Trump - have expressed their desire to the US administration to negotiate lower tariffs.
- Even though Trump is initially sticking to an additional ten percent tariff on European goods and has also added extra on cars, steel and aluminum, these are not measures that will directly affect inflation in Denmark, Tore Stramer believes.
More or less the same wording comes from Palle Sørensen, chief economist at Nykredit.
- Even though Trump last night (Wednesday evening, ed.) pulled back a bit with his three-month pause on his very high tariffs, so there is still a ten percent tariff on European goods, he writes in a comment.
- At Nykredit, however, we believe that the downward effects on inflation will overcome the upward ones, so the best bet from here is a series of years with low inflation in our country.
jel /ritzau/
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