Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Inflation in the Nordic countries - Statistics & Facts
In the aftermath of the COVID-19 pandemic, consumer prices started to increase globally from the fall of 2021. Then, Russia's invasion of Ukraine in February 2022 spurred the economic instability in the world even further. All around the world, inflation rates increased through 2022 and continued into 2023, meaning an increase in prices, so also in the Nordic countries. For instance, the annual inflation rate in Denmark reached 10 percent in October 2022, meaning that prices in the country had increased by 10 percent compared to the same month the previous year, but the inflation rate had dropped to around three percent by mid-2023.
Furthermore, commodities such as wheat and sun flower have been badly affected by the war in Ukraine, as Russia and Ukraine are major producers of these goods. Although the prices of these products have increased in the Nordic countries after Russia's invasion of Ukraine, it is the countries in the Global South that are most vulnerable to the supply disruption.
However, compared to some other countries outside of the EU, inflation rates are modest. In Turkey, for instance, inflation rates reached an extremely high level of 85 percent in October 2022, before falling below 40 percent by June 2023. This pales, however, in comparison to Venezuela, who had an inflation rate of 200 percent in 2022, the highest in the world at the time. In countries in the Global South, especially in Sub-Saharan Africa, where high shares of the population already struggle to make ends meet, the increasing inflation risked causing large-scale starvation.
Sectoral differences
As Russia was a major supplier of oil and natural gas to Europe before the invasion of Ukraine, inflation has been especially high across this sector following the war in Ukraine. Gas and electricity prices have skyrocketed, as seen in Iceland. There are differences between the five Nordic countries. For instance, as a substantial amount of Norway's electricity supply comes from hydropower, a low level of water in the country's water magazines towards the end of 2021 caused electricity prices in the country to rise rapidly towards the end of the year. As a result, the inflation in the country in November and December that year was higher than in the other Nordic countries.Furthermore, commodities such as wheat and sun flower have been badly affected by the war in Ukraine, as Russia and Ukraine are major producers of these goods. Although the prices of these products have increased in the Nordic countries after Russia's invasion of Ukraine, it is the countries in the Global South that are most vulnerable to the supply disruption.
International comparison
Of the Nordic countries, Sweden recorded the highest inflation rate in July 2023. However, inflation in the Nordic countries has not been as severe as in several other European countries, especially in Eastern Europe, where inflation rates in some countries almost reached 20 percent. In total, the Harmonized Index of Consumer Prices in the European Union stood at 6.4 percent in June 2023, with food and non-alcoholic beverages being the sector most severely affected.However, compared to some other countries outside of the EU, inflation rates are modest. In Turkey, for instance, inflation rates reached an extremely high level of 85 percent in October 2022, before falling below 40 percent by June 2023. This pales, however, in comparison to Venezuela, who had an inflation rate of 200 percent in 2022, the highest in the world at the time. In countries in the Global South, especially in Sub-Saharan Africa, where high shares of the population already struggle to make ends meet, the increasing inflation risked causing large-scale starvation.
