The private economy is improving – but the fear of inflation and political uncertainty is lurking.

While many Danes are experiencing an improvement in their personal finances, there is still concern about the future. A new analysis from Finance Denmark shows that fear of rising inflation and interest rates is particularly affecting consumer confidence, which has fallen significantly after the US presidential election.

After several years of high inflation and rising interest rates, the pressure on Danish finances has diminished. Today, just over one in seven Danes say they have strained finances – an improvement compared to last year when the number was close to one in five. Before the inflation and interest rate shock, however, it was only about one in ten who felt financial pressure.

According to Niels Arne Dam, chief economist at Finance Denmark, the improvement is due in part to the resilience of the Danish economy with increasing employment and low unemployment. Wages in the private labor market have risen significantly over the past three years and have now caught up with price increases, strengthening the purchasing power of the Danes.

Despite the positive developments, one out of ten Danes are worried about their finances in the coming year. Among those concerned, two out of three cite the risk of rising prices and/or interest rates as one of their biggest worries – and for a third of them, it is their primary concern.

Niels Arne Dam highlights that before 2022, Danes generally had confidence in stable prices and low interest rates. However, the economic developments in recent years have changed this view, and many are now more aware of uncertainties in the economic reality.

In addition, international factors play a role. The survey shows that nearly half of those surveyed place Donald Trump and his political decisions among their top three concerns. Consumer confidence has experienced a significant drop after the US presidential election, which according to the analysis is largely due to uncertainty about the Danish economy.

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