Danish inflation likely to accelerate above 1 pct in 2017, says Danske Bank

Slightly higher wage growth in Denmark might start pushing prices up in 2018, particularly on domestically-produced services. A few of technical factors are also expected to contribute to pushing inflation slightly higher in the time ahead, noted Danske Bank in a research report.

The pronounced drop in mobile phone roaming charges in 2016 will slip out of the inflation statistics in the summer. While roaming prices might fall further, rising prices on mobile phone subscriptions would pull in the other direction. In all, this would push inflation back above 1 percent, stated Danske Bank.

Furthermore, rents are expected to increase further in 2018 as compared to the previous years, as developments in the regulated sector of the housing market rely on the pace of inflation in the earlier year. Therefore, the higher inflation that have been seen recently would automatically raise inflation slightly higher. But there is nothing to imply that underlying price pressures in the Danish economy would increase considerably anytime soon.

“We estimate inflation will come in at 1.1% this year and 1.4% next year”, added Danske Bank.