COPENHAGEN -The battle in Ukraine will considerably influence Denmark’s economic system and trigger larger inflation, the Danish central financial institution stated on Wednesday, after it reduce its development forecast for the yr.
The central financial institution stated it now anticipated the economic system to develop 2.1% each this yr and the subsequent, down from an earlier prediction of three.1% development this yr.
The financial institution “assesses that the battle will scale back GDP development by roughly 1 share level and improve inflation by about 2 share factors this yr,” governor Lars Rohde stated in an announcement.
It forecast shopper costs to rise by 4.9% this yr, earlier than dropping to 1.4% and a couple of.2% in 2023 and 2024, respectively.
The central financial institution had forecast a fast restoration for the Danish economic system this yr, however subdued investments and better value will increase because of Russia’s invasion of Ukraine will put a dent in that increase, the central financial institution stated.
“Wholesome private and non-private financial savings balances and really low unemployment give the Danish economic system a superb place to begin for dealing with the financial penalties of Russia’s invasion of Ukraine,” Rohde stated.
The central financial institution stated it anticipated the approaching years to be characterised by capability stress and low unemployment.
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