See also
See the press conference and related publications
Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
The outlook is for a stable price development in the Danish economy
Employment in Denmark has continued to rise, but with no signs that the pressure on the labour market has increased further over the past year. In the coming years, wage increases are expected to slow down due to less pressure on the labour market and significantly lower inflation compared to a few years ago. Lower wage increases will help ensure stable price development. However, there is still some pressure on the labour market and it is crucial that wage increases come down from the current high levels as they are not compatible with low, stable inflation in the long term. In the current situation with continued high wage increases and some pressure on the labour market, including low unemployment, it is not a good time to ease fiscal policy to the extent proposed in the government’s proposal for the 2025 budget.
Key messages
Why is it important?
Danmarks Nationalbank continuously oversees the Danish economy to meet our objective of ensuring price stability. To this end, we prepare assessments of economic trends and macroeconomic projections to have the best possible foundation for assessing whether economic imbalances are building, such as the recent spike in inflation. As Danmarks Nationalbank’s interest rates are reserved for managing the exchange rate of the krone, it is important that other aspects of economic policy are aimed at ensuring a stable economy. Therefore, we make, for example, fiscal policy recommendations.
This analysis is also supplemented by a thematic analysis that goes into the latest developments in the housing market in-depth.
Main chart
Employment is rising with no signs of increasing pressure on the labour market
Note:
Payroll employment. Labour shortages are weighted by a weighted average of the proportions in manufacturing, construction and services. The weights correspond to the industry sectors’ proportion of employment.
Source:
Statistics Denmark and own calculations.