What is inflation?
Consumer Price Index (CPI) Inflation is the general increase in prices over time. In Denmark, it's measured via the Consumer Price Index from Statistics Denmark, which tracks price developments for a basket of typical goods and services.
Danish inflation was approx. 2% in 2024, normalized after 2022-23 when it exceeded 8%. Cumulative price increase since 2015 is approx. 20%, according to Statistics Denmark's consumer price index.[↗]
When inflation rises, you can buy less for the same money. 3% inflation means something that cost 100 DKK this year costs 103 DKK next year.
Historical inflation in Denmark
Danish inflation has varied significantly over the years. After a long period of low inflation (under 2%), we experienced a marked increase in 2022-2023 primarily due to the energy crisis.
2008
Financial crisis - 3.4% inflation
2015
Low inflation - under 1%
2022
Energy crisis - inflation over 8%
2024
Normalization - around 2%
Purchasing power explained
Nominal vs. real wages
Your nominal wage is the amount on your payslip. Your real wage is what you can actually buy with the money - your wage adjusted for inflation.
Real wages = salary increase minus inflation. If your salary rises 3% but inflation is 2%, your real salary increase is only 1%. The National Bank's inflation target is 2% per year.
Example: 30,000 DKK in 2015
30,000 DKK in 2015 equals approximately 36,000 DKK in 2024 in purchasing power. If your salary has only increased to 33,000 DKK, you've effectively had a pay cut.
Inflation calculator
Use the calculator to see what an amount from an earlier year equals today - or vice versa.
Inflation calculator
2015 → 2024
35.640 kr
Total inflation
+18.8%
Difference
+5.640 kr
30.000 DKK in 2015 equals 35.640 DKK in 2024 in purchasing power.
Salary negotiation tips
Know the inflation rate
Before your salary negotiation, check current inflation. A 2% raise is actually a pay cut if inflation is 3%.
Ask for inflation + X%
A good rule of thumb is to ask for inflation plus 1-2% for real wage growth. This ensures your purchasing power increases.
Look at the total package
Remember that pension, bonus and other benefits also need to be adjusted to keep pace with inflation.
FAQ
Inflation is the general increase in prices over time, which means your purchasing power decreases. If inflation is 3% per year, you can buy 3% less with the same money next year. In Denmark, inflation is measured via the Consumer Price Index (CPI) from Statistics Denmark.
The Consumer Price Index (CPI) is Statistics Denmark's measure of price developments for a basket of goods and services that a typical Danish household purchases. The basket includes everything from food and housing to transport and leisure. CPI is used as the official measure of inflation.
Nominal wages are the amount on your payslip - the actual kroner amount. Real wages are your wages adjusted for inflation, showing what you can actually buy with the money. If your salary increases 2% but inflation is 3%, your real wages have decreased by 1% - you can buy less than before.
The high inflation in 2022-2023 (up to 8-9%) was primarily due to the energy crisis following Russia's invasion of Ukraine, supply chain problems after COVID-19, and rising food prices globally. Inflation has since fallen towards the National Bank's target of around 2%.
If your salary doesn't increase at least as much as inflation, you experience a real wage decrease - you can buy less with your salary. That's why it's important during salary negotiations to know the current inflation rate and ensure your raise at least matches inflation.
Core inflation is inflation measured without the most volatile prices - typically energy and food. This provides a more stable picture of underlying price developments. Central banks often use core inflation to assess long-term inflation trends.
You can protect yourself from inflation by: 1) Negotiating salary increases that match or exceed inflation, 2) Investing in assets that historically beat inflation (stocks, real estate), 3) Avoiding large cash holdings, and 4) Considering inflation-indexed bonds.
Deflation is the opposite of inflation - a decrease in the general price level. While lower prices may sound positive, deflation can be harmful to the economy as it can lead to postponed consumption and falling wages. Central banks typically aim for low, stable inflation (around 2%) rather than deflation.