Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Global factors are driving high food prices in Denmark and abroad
Developments in food prices have a major impact on the price changes that Danes experience in their daily lives. Food and non-alcoholic beverages are purchased frequently and in predictable patterns, making price changes noticeable from week to week. Since 2021, prices of food and non-alcoholic beverages have risen by 32 per cent, twice as much as the overall consumer price index. Price increases have been particularly pronounced for coffee, cocoa, and beef and veal, where supply has been constrained by factors such as weather-related production challenges and a shrinking cattle population. Meanwhile, food consumption has remained relatively stable, reinforcing the view that price developments have been driven primarily by supply-side factors.
Key messages
Why is this important?
As Denmark’s central bank, one of Danmarks Nationalbank’s key responsibilities is to contribute to price stability. Recently, food prices have had a significant impact on inflation, making it important to analyse their development to understand inflation dynamics. At the same time, it is essential to compare price trends in Denmark with those in other countries, particularly the euro area, due to the fixed exchange rate policy.
Main chart
The rise in consumer prices for food and non-alcoholic beverages is not unique to Denmark but is broadly observed across both the EU and the euro area
Consumer prices for food and non-alcoholic beverages measured at constant taxes
Note:
Consumer prices are measured at constant taxes, which removes the effect of taxes and duties applied at final consumption. Data is seasonally adjusted.
Source:
Eurostat and own calculations.