COPENHAGEN: Danish consumer price inflation fell in January for the first time in five decades as cheaper oil cut petrol and heating costs, although analysts said a prolonged period of deflation was unlikely.
Statistics Denmark said on Tuesday consumer prices as calculated using the domestic method fell 0.1 percent year-on-year in January after rising by 0.3 percent in December, the first monthly fall since 1954. That was in line with analysts' forecasts.
Using the EU-harmonised consumer price index (HICP), prices fell 0.3 percent in January compared to December's 0.1 percent rise, the first fall since Denmark started using this method in 1996.
Analysts were not too concerned, however, with some suggesting a short period of deflation could help domestic spending and boost recovery.
"As long as the low inflation is due to falling energy prices and smaller duties, it is supporting the purchasing power of Danish households," Nordea Senior Analyst Jan Storup Nielsen said in a note.
"We're currently a long way from (a sustained fall in prices), and thus see the historically low rates as a necessary gift to the Danish economy."
The government has cut its economic growth forecast for 2015 to 1.4 percent from a previously expected 2.0 percent.
The inflation figures do not feed significantly into one of the main economic issues facing Denmark now - a currency that is straining at the upper end of its long-established peg to the euro.
The central bank has been slashing interest rates, which usually helps push up prices, and selling crowns for foreign currency in the market, but upward pressure on the crown has persisted as investors seek Danish assets such as bonds.
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