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How much will rising prices cost Danish families each month?

The cost of living crisis in Europe – and Denmark – is far from over. According to a new estimate, Danish families could end up paying several thousand kroner extra each month in 2023 due to rising prices.

The high levels of inflation in 2022 could continue into 2023. Photo by Eduardo Soares / Unsplash

The high inflation levels that have plagued the Danish economy in 2022 could spill over into the next year.

At least that’s what Camilla Schjølin Poulsen, an economist at PFA Pension, the largest privately owned life insurance company in the country, believes.

Compared to 2021, a typical Danish family has had to find an extra 4,000 kroner in their monthly budget in order to keep up with higher expenses for heating, electricity, petrol, food, and other day-to-day items this year, TV 2 reports.

The monthly toll of inflation in 2023

According to a calculation from PFA, in 2023, a Danish family will need to find 6,000 kroner more per month if they are to continue to keep up with price growth.

“With the inflation that the central bank and De Økonomiske Vismænd institution expect, it is not unrealistic that a typical Danish family should expect to pay an additional 2,000 kroner every month. So, a total of 6,000 kroner more for everyday items compared to the price level in 2021,” the PFA calculation states.

The calculation is based on an average family of four with a car that runs on petrol and a detached house heated with natural gas.

According to the PFA, those living in a home connected to the district heating network have seen a less extensive increase in their bill in the past year.

Overall inflation

The PFA states that inflation in Denmark has amounted to approximately eight percent over the whole of 2022.

The country’s central bank believes it will end up at four percent next year, while the De Økonomiske Vismænd institution expects it to amount to 5.1 percent.

In times not characterized by crises, inflation tends to be between one and two percent per year.

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Are price increases coming to a halt at Danish shops?

One in ten stores in Denmark expects to put prices up during the next three months.

Are price increases coming to a halt at Danish shops?

Inflation and high costs from suppliers have seen stores raise prices consistently in Denmark since early 2022, but the trend looks likely to slow down in the near future.

One in ten retail stores say they expect to put prices up during the next three months, according to an analysis from Statistics Denmark released on Tuesday.

That means the majority of shops do not plan to increase costs to customers over the summer.

A year ago, as many as six in ten stores planned price increases according to analyst Brian Friis Helmer, senior economist with Arbejdernes Landsbank.

“It is very good news for Danish consumers that markedly fewer businesses expect to raise prices. Especially at a time when many people’s private finances have been under fire,” Helmer told news wire Ritzau.

“But that doesn’t mean with any certainty that any hopes should be raised about prices falling,” he said.

Most retail stores said they expect their prices to be unchanged according to the Statictics Denmark analysis.

Falling energy and production prices are the key factor in the stabilisation of the end cost for consumers, senior economist Kristian Skriver of the Danish Chamber of Commerce said.

“At the same time, transport rates have normalised, making it easier to transport goods across the world,” he said.

“Lower prices for energy, transport and raw materials will eventually benefit Danish consumers,” he said in a written comment.

Around 7 percent of stores said they expect to reduce prices in the coming quarter.