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.
The persistent decline in the consumption to income ratio: causes and drivers
The consumption to income ratio has declined significantly since 2019 and is now at a historically low level. The decline is particularly driven by households at each end of the age spectrum. This development breaks with previous correlations between consumption, income, wealth and unemployment, and therefore requires new explanations. The study points to increased uncertainty and more pessimistic expectations as key drivers. Going forward, developments in consumption will therefore depend on factors such as global conditions and how households respond to the associated uncertainty.
Key messages
Why is it important?
Private consumption makes up a large share of domestic demand, making it an important factor to understand when assessing the current state of the economy. In recent years, the consumption growth has been weak when taking into account the development in income, and it is essential to get to the bottom of the reasons for subdued consumption to support Danmarks Nationalbank's projections for the Danish economy.
Main chart
The consumption ratio is historically low
Note:
The latest observation is Q4 2025 for private consumption and Q3 2025 for disposable income and consumption ratio.
Source:
Statistics Denmark and own calculations.