Jan Størup Nielsen, analyst at Nordea Markets, points out that the Danish inflation fell to 0.7% y/y in May, down from 1.0% last month as the bigger-than-expected drop was mainly caused by lower prices on electricity and travel.
Key Quotes
“Compared to April, the consumer price index fell by 0.1% in May. The main drag came from Recreation and culture (-0.15% point) as prices on package holidays and air tickets fell due to the normal seasonal effects around Easter. Also falling prices of electricity caused Housing to subtract 0.11% point from the month-over-month change. On the other hand, higher prices on Food (especially chocolate) and hotels made positive contributions in May.”
“Measured year over year, inflation fell by 0.3% point in May to 0.7% – the lowest reading since September 2018.”
“Over the coming months we expect Danish inflation to stay around the current level as especially negative base effects on Transport will make a negative contribution. On the other hand, food prices will most likely make positive contributions. On average, we expect Danish inflation to reach 1.0% in 2019, up from 0.8% in 2018.”
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