Denmark to see modest inflation outlook next year

Inflation rate in Denmark is decelerating further in November. The headline inflation reduced to 3.0% year on year in November. The trend is expected in December also as the prices of food, furniture, and oil are continued falling.  

The inflation rate is expected to increase in January due to base effect. However, due to lower oil price the inflation rate unlike to reach 1%. 

"We still expect growing employment to trigger slightly higher pay rises, particularly in 2017, when many wage agreements are due to be renegotiated. Coupled with the modest inflation outlook, this means we now expect real wages to grow faster in 2016 than previously expected, with real wage growth set to be almost as high next year as in 2015. Consequently, real income gains  should continue to support consumer spending and thus GDP growth", says Danske Bank in a research note.