Highest annual pay rise since 1988 anticipated

Private sector wages in Denmark are rising at a high rate, with the first quarter of 2023 witnessing a 5.3% increase compared to the same period last year. This marks an acceleration from the last quarter of 2022. According to DA (Dansk Arbejdsgiverforening) Chief Economist Anders Borup Christensen, this is the fastest growth since 1988, driven by a tight labor market. The DA expects the final figures to range between 5.1% and 5.5%, and these will be published at the end of May. Danske Bank’s Chief Economist Las Olsen describes the wage growth as ‘quite historic’ and the real wages have increased by about 4% year-on-year. Despite this growth, due to high inflation in 2022, purchasing power has diminished by 2.6% from its peak, but it is expected to recover to previous high levels within a year.