Denmark: Consumer confidence recovers in January
January 23, 2019
The consumer confidence index released by Statistics Denmark recovered slightly at the first of the year, rising to 3.9 points in January from December’s two-year low of 2.9 points. Consequently, the index remained above the crucial zero-point mark that separates optimism from pessimism among consumers, where it has been for two consecutive years.
While January saw an overall improvement in consumer confidence, the results were mixed among the components of the index. Consumers were more optimistic about the outlook of their financial situation over the next 12 months, moreover, their assessment of their prior financial situation was also more upbeat. They also expressed a less downbeat opinion on the outlook for the labor market in the next 12 months.
However, while households viewed last year’s general economic situation more positively, their outlook for the economy for the next 12 months fell below the symbolic zero-point threshold to an over two-year low in January. In addition, consumers were less optimistic about their current personal financial situation and remained pessimistic about making major purchases now or in the future. This is not entirely surprising given Danish household debt is the highest among OECD countries, which makes borrowers more sensitive to changes in economic conditions.
Denmark Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to expand 2.3% in 2019, which is down 0.1 percentage points from last month’s forecast. In 2020, panelists expect private consumption to grow 2.2%.
Author: Lindsey Ice, Economist