COPENHAGEN: Danish consumer prices rose last year at their slowest pace since 1953, dragged down by cheaper energy and excess capacity in the economy. Consumer prices rose only 0.5 percent in 2015 from 2014, the lowest year-on-year increase since 1953, Statistics Denmark said on Monday.
Excluding lower energy prices, inflation was 1.2 percent in 2015. In 2014, the inflation rate only marginally higher, at 0.6 percent. “The fact that inflation continues to be low is a sign of crisis,” Danske Bank’s chief economist, Las Olsen, said in a note to clients, citing excess capacity in the economy following the financial crisis as a cause. However, low inflation is helping the economy in some respects, Olsen said.
“The very low inflation in the last two years largely explains why we have had good growth in private consumption and consequently a recovery in the economy, although exports have disappointed,” Olsen said. Most economists expect Danish inflation to pick up this year. Few are worried about a deflationary spiral.
Following the EU-harmonised method (HICP) Danish inflation rose 0.3 percent in December year-on-year, accelerating from a 0.1 percent increase in November.
Other data from Statistics Denmark on Monday showed that Danish industrial production fell 0.9 percent in November and that the country’s current account surplus grew to 11.9 billion Danish crowns ($1.74 billion) in November from 10.1 billion crowns in October.
