26 March 2026
The outlook for the Danish and global economy is characterised by persistent geopolitical uncertainty, trade conflicts and rising energy prices. But the Danish economy is fundamentally in good balance with high employment and low unemployment, Danmarks Nationalbank assesses in its projection for the Danish economy, published today.
Danmarks Nationalbank expects inflation to be low in the coming years, but developments in energy prices as a result of the war in the Middle East pose a significant risk to inflation going forward.
"Despite current increases in energy prices, we do not expect that we are facing an inflation crisis like the one we experienced after Russia's invasion of Ukraine," says Governor Christian Kettel Thomsen.
Danmarks Nationalbank expects inflation to be 1.8 per cent this year, 2.0 per cent in 2027 and 1.9 per cent in 2028. Danmarks Nationalbank has also prepared a risk scenario where oil and gas supplies from the Persian Gulf are limited further and where oil and gas prices are significantly and long-term above current market prices. In that case, inflation this year is estimated to end up at 4.5 per cent.
Danmarks Nationalbank also has two recommendations for fiscal policy for the coming years.
"We estimate that there is only limited spare capacity to increase production without pushing up wage increases and inflation. In the 2027 fiscal bill, the new government should therefore not push demand beyond what has already been planned in the previous government's 2035 plan," says Christian Kettel Thomsen.
In the coming years, Denmark will face major expenses for defence, climate and demographic development, among other things.
"The permanent increase in defence spending by kr. 75 billion compared to before Russia's invasion of Ukraine means, among other things, that the room for further priorities is now significantly smaller. At the same time, it is important to keep in mind that the fiscal space may change with new estimates for future economic development," says Christian Kettel Thomsen and continues:
"Therefore, we believe that the next government should exercise caution in realizing all the fiscal space or to increase the fiscal space further in the individual years through weakening of the structural balance."
Denmark's gross domestic product, GDP, is expected to increase 1.8 per cent this year and next year and 2 per cent in 2028. Core inflation is projected to be 2.2 per cent in 2026, 2.1 per cent in 2027 and 1.7 per cent in 2028.
On Thursday, Danmarks Nationalbank also published analyses on private consumption and on monetary and financial trends. The analyses can be found on www.nationalbanken.dk.
Media inquiries may be directed to communications and press adviser Peter Levring by phone +45 2620 1809 or email pnbl@nationalbanken.dk.