Danes’ confidence in the economy drops to historic low

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COPENHAGEN, (Reuters) – Danes’ confidence in the Danish economy reached a historic low in May as rising interest rates and inflation weighed on households, according to a survey among consumers from Statistics Denmark published this week.

Consumer confidence for May dropped to a record -22.4 points, the lowest registered since the monthly survey began in 1974.

“The decline in consumer confidence is primarily due to a sharp decline in … consumers’ assessment of Denmark’s economic situation today compared with a year ago,” Statistics Denmark said.

The agency also recorded a significant drop in families’ view on their own household economy now compared to a year ago.

“It’s remarkable because the economy is doing well right now. Unemployment is low and employment is soaring,” Sydbank’s chief economist Soren Kristensen said in a note, but added that rising inflation and interest rates challenged consumers.

“It does not bode well for the economy, but it is far from guaranteed that consumer concerns will seriously strain consumption,” Kristensen said.

(Reporting by Nikolaj SkydsgaardEditing by Raissa Kasolowsky)

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