DENMARK / RankWire.AI / – According to official data, Denmark’s annual inflation rate slowed to 1.7% in July from 1.9% in June. The agency, Statistics Denmark, indicated that consumer prices rose by 1.3% compared to the previous month. The core inflation rate remained steady at 2.3%, matching the June figure. Notably, price hikes in the hospitality sector, including restaurants and hotels, continued to significantly influence the inflation index. Additionally, rentals of holiday homes contributed strongly during the busy summer travel period.
In July, the consumer price index stood at 102.92, with 2025 serving as the base year of 100. The combined effect of holiday home rentals and package holidays added 1.24 percentage points to the monthly increase, while food prices contributed an additional 0.15 point. Conversely, categories like clothing, hotel accommodation, and footwear experienced a decline, collectively reducing the monthly increase by 0.34 percentage point.
Rent prices contributed the most to the annual inflation figure, adding 0.55 percentage points. Holiday home rentals followed closely, adding 0.51 point, and fuel prices contributed 0.39 point. Electricity costs, on the other hand, lowered the annual inflation rate by 0.68 point. Food prices decreased the rate by another 0.26 point, and package holidays shaved off 0.06 point from the yearly figure. Collectively, these movements in categories resulted in the headline inflation rate falling below its June level.
Service sector continues to grow faster than goods
Prices in the restaurant and hotel sectors increased by 8.1% from the previous year, marking the highest growth among primary consumer categories. Transport costs rose by 5.5%, while expenses for information and communication went up 4.6%. Education prices saw an increase of 4.5%, and insurance and financial services gained 2.9%. Meanwhile, prices for food and nonalcoholic beverages declined by 1.6%, and household furnishings, equipment, and related services fell by 1.1%.
Compared to July 2025, service prices increased by 3.8%, whereas goods prices decreased by 0.7%. The dominant factor behind the 2.3% core inflation rate was higher rents. The prices for housing, water, electricity, gas, and other fuels remained unchanged on an annual basis. Healthcare costs increased by 0.7%, and prices for recreation, sports, and culture rose by 0.8%. These figures underscore a noticeable disparity between the inflation rates of services and goods.
The harmonised inflation rate also shows a decline
Denmark’s harmonised index of consumer prices increased by 1.6% from July 2025, down from 1.8% in June. This measure facilitates inflation comparison across European Union member states. The national CPI includes owner-occupied housing through estimated rental values, while the harmonised index excludes this component. In June, Denmark’s harmonised inflation rate was 1.8%, with Sweden at 1.0% and the Czech Republic at 1.1%. The full EU inflation data for July had not been released at the time.
The net price index, which removes indirect taxes and duties where possible and considers subsidies that lower consumer prices, increased by 2.6% year over year in July, slightly down from 2.7% in June. When calculated at constant tax rates, the harmonised index rose by 2.4% from July 2025. Statistics Denmark compiles the CPI based on approximately 23,000 prices collected from around 1,600 shops, companies, and institutions. The next consumer price update is scheduled for September 10.