Colliers Denmark Market Report 2024

93

COLLIERS MARKET REPORT 2024

HOTEL INDUSTRIAL & LOGISTICS RETAIL RESIDENTIAL OFFICE

Inflation in Denmark back under control Inflation has been high in recent years, driven by hikes in energy prices in particular. Inflation peaked in October 2022 with an annual increase in the net price index of 10.3%. Since then, inflation has slowed and annual net price inflation has fallen to 1.0% in December 2023, with falling energy prices having a downward impact on inflation. Although energy prices have fallen significantly, as of December 2023 they are still around 48% higher than in H1 2021. It is worth noting that core inflation, which excludes energy and non-processed food, remains at an elevated level. This is partly due to the indirect effects of the high energy prices of previous years in the produc tion of goods and services, which are still reflected in con sumer prices. However, core inflation is falling as the indi rect effects have started to wane and it is expected to

fall further in 2024, according to Danmarks Nationalbank. Total year-on-year inflation is expected to drop from 3.8% in 2023 to 3.0% in 2024. Danish economy has favourable framework conditions The conditions for doing business in Denmark remain exceptionally favourable compared to the rest of the world. On TMF Group’s ”Global Business Complexity Index 2023”, Denmark is ranked second, only surpassed by the Cayman Islands. Denmark is therefore considered to be one of the coun tries with the lowest complexity when it comes to starting and running a business. In general, good business condi tions, a stable political environment and a robust econ omy mean that many international investors continue to see Denmark as a safe haven for their investments.

Downtrending energy prices driving down inflation

10% 11%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

-4% -3% -2% -1%

Oct. Mar. Feb. Jan. Dec. Nov. Oct. Sep. Aug. Jul. Jun. Nov. Dec. Jan. Feb. Mar. Apr. May

Oct. Sep. Aug. Jul. Jun. Apr. May

Nov. Dec.

2021

2022

2023

Core net price index

Energy

Non-processed foods

Net price index

Note: Relative change in the net price index compared to the same month the previous year. The bars show growth contributions to net price inflation. Core net price inflation is calculated as the change in the net price index excluding energy and non-processed foods. Source: Statistics Denmark, Colliers

Martin Lerche Associate I Valuation & Advisory martin.lerche@colliers.com

Gregers Nytoft Rasmussen Director, Head of Research I Valuation & Advisory gregers.nytoft@colliers.com