Despite Trump and tariff threats: Positive inflation news
In March, consumer prices rose by 1.5 percent compared to the same month last year.
This is according to an update from Statistics Denmark, which was released Thursday morning.
This marks a significant drop in inflation after it was recorded at 2.0 percent in February.
The primary reason for the decline is that electricity prices fell between February and March, according to Statistics Denmark.
According to Tore Stramer, chief economist at Dansk Erhverv, part of the explanation also lies in lower gasoline prices.
Regardless of the explanation, it is positive news that inflation is falling amid global instability, he believes.
- However, it is clear that consumer prices at home can be affected by developments in the trade war with the U.S., he writes in a comment.
- But for now, there is no reason to expect a significant increase in inflation due to the trade war.
In the past week, economists have discussed the risk of a recession after U.S. President Donald Trump chose to impose higher tariffs on a number of countries.
A recession is defined as a period of negative growth.
On Wednesday, the president decided to pause his tariff plans for 90 days.
This was because many countries, according to Trump, expressed a desire to negotiate with the U.S. administration about lower tariff rates.
- Although Trump is sticking to an extra 10 percent tariff on European goods and has also added more to cars, steel, and aluminum, these are measures that will not directly affect inflation in Denmark, says Tore Stramer.
A similar message comes from Palle Sørensen, chief economist at Nykredit.
- Even though Trump yesterday evening (Wednesday evening, ed.) pulled back a bit with his three-month pause on his very high tariffs, there is still a 10 percent tariff on European goods, he writes in a comment.
- At Nykredit, we believe the downward effects on inflation will outweigh the upward effects, so our best forecast is a period of low inflation at home.
/ritzau/
