Inflation in Denmark making a comeback, likely to hit 1 pct mark at start of 2017

After remaining very low throughout 2016 due initially to low energy prices and subsequently because of a plunge in prices of mobile phone services and clothing, Denmark consumer price inflation is set to rise as we head into 2017.

Indeed, inflation in 2016 was at its lowest level since 1953. As rent increases in large parts of the residential rental market are linked to the previous year’s inflation numbers, we can expect a certain inertia in Danish inflation.  However, last year’s low inflation level is likely to keep a lid on inflation in 2017.

"We expect it to hit the 1 percent mark at the beginning of 2017 for the first time in three years. We expect inflation to rise to 1.3 percent in 2017, and while this is much higher than the levels of the past few years, inflation remains subdued." said Danske Bank in a report.