Danske Bank skriver i en analyse
Inflation in Denmark is headed even lower than expected because of the drop in commodity prices.
– Our updated forecast is for CPI inflation to bottom out at 0.0% y/y in January.
– HICP inflation could reach 0.0% y/y already in October and then turn negative.
– Hence, we face a strong possibility of outright deflation. However, that has not worsened the outlook for the real economy – on the contrary, lower commodity prices are a net boost.
As we have previously noted, Danish inflation has failed to show the expected increase during 2014. There was a surprisingly large decline in food prices in the first half of the year, followed by drags from day-care prices and lately from energy and once again from food, as lower commodity prices are feeding through. The full effect of the recent drop in energy prices will not be visible until inflation data for October are published on 10 November. Our estimate for that reading is 0.2% y/y CPI growth, down from 0.5% y/y in September. HICP, where rents have less weight, looks likely to come out at 0.0% y/y
