Government expects notable wage increases next year

Denmark’s Ministry of Economic Affairs forecasts a 1.5% real wage growth for private sector employees next year. The Economic Report anticipates a private sector hourly wage rise of 3.4%, over the expected inflation of 1.9%, implying improved purchasing power if projections hold. Sydbank’s Senior Economist Mathias Dollerup Sproegel sees the possibility of additional wage hikes due to strong economic activity and a tight labor market. Current wage growth of 5.3% has raised concerns of wage-price spirals, but Sproegel deems the forecasted 3.4% rise manageable, echoed by Sofie Holme Andersen of the Danish Confederation of Trade Unions’ Economic Council. The report also predicts higher consumer spending growth, jumping from 0.3% this year to 1.8% next year and 2.2% by 2026.