Børsens News Service in English
The Danes are more willing to save than to spend
Af Uffe Hansen
01-09-2010
11:55
Tax reliefs, wage increases and low interest rates are not enough. The Danes keep their money in the pocket and will rather increase their bank deposits than spend their money on the summer sales.
Although the retail sales have increased by 0.3 per cent in July, there is still a long way to go, the economists say. They had hoped for a faster increase, especially as a rising private consumption is seen as the motor which would help drive Denmark out of the crisis and create growth.
»At first sight, the stagnating retail sales are somewhat disappointing given the last six months’ strong increase in the households’ disposable income as a consequence of the tax reliefs and the record low interest rate level,« said senior analyst Jan Størup Nielsen at Nordea Markets.
Chief economist Jacob Graven at Sydbank said that the Danes use less money in the shops. Instead they spend their money on cars and online shopping – and on increasing their bank deposits.
But this development is also undermining the importance of the retail key figure as an indicator for the private spending. For one thing, the car sales rose significantly by 25 per cent in the first half-year which is not included. And besides, the consumers have increased their shopping at online shops instead of traditional shops, Jacob Graven noted. Consequently, he believes that the reality is less gloomy.
»Part of the money is still saved. The households’ disposable income is increasing by about 6 per cent in 2010. But the increase in the private consumption was only just under 3 per cent in the first half-year,« he wrote.
Also economist Las Olsen at Danske Bank believes that the retail sales have become too unclear.
»We still assume that the very strong increase of the Danes’ disposable income – driven by tax reliefs and low interest rates – will translate into continued increase of the consumption here in the second half-year. But we also assume that the increase will only be moderate because the economic uncertainty is still massive,« he wrote.
Chief economist Jes Asmussen at Handelsbanken wrote that »the total retail sales in July are thus nearly 2 per cent below the level in the same month last year – in spite of the many stimuli, tax reliefs and lower interest rates.
Although the retail sales have increased by 0.3 per cent in July, there is still a long way to go, the economists say. They had hoped for a faster increase, especially as a rising private consumption is seen as the motor which would help drive Denmark out of the crisis and create growth.
»At first sight, the stagnating retail sales are somewhat disappointing given the last six months’ strong increase in the households’ disposable income as a consequence of the tax reliefs and the record low interest rate level,« said senior analyst Jan Størup Nielsen at Nordea Markets.
Chief economist Jacob Graven at Sydbank said that the Danes use less money in the shops. Instead they spend their money on cars and online shopping – and on increasing their bank deposits.
But this development is also undermining the importance of the retail key figure as an indicator for the private spending. For one thing, the car sales rose significantly by 25 per cent in the first half-year which is not included. And besides, the consumers have increased their shopping at online shops instead of traditional shops, Jacob Graven noted. Consequently, he believes that the reality is less gloomy.
»Part of the money is still saved. The households’ disposable income is increasing by about 6 per cent in 2010. But the increase in the private consumption was only just under 3 per cent in the first half-year,« he wrote.
Also economist Las Olsen at Danske Bank believes that the retail sales have become too unclear.
»We still assume that the very strong increase of the Danes’ disposable income – driven by tax reliefs and low interest rates – will translate into continued increase of the consumption here in the second half-year. But we also assume that the increase will only be moderate because the economic uncertainty is still massive,« he wrote.
Chief economist Jes Asmussen at Handelsbanken wrote that »the total retail sales in July are thus nearly 2 per cent below the level in the same month last year – in spite of the many stimuli, tax reliefs and lower interest rates.
*****||*****The Danes are more willing to save than to spend*****||*****Tax reliefs, wage increases and low interest rates are not enough. The Danes keep their money in the pocket and will rather increase their bank deposits than spend their money on the summer sales.
Although the retail sales have increased by 0.3 per cent in July, there is still a long way to go, the economists say. They had hoped for a faster increase, especially as a rising private consumption is seen as the motor which would help drive Denmark out of the crisis and create growth.*****||*****
News from borsen.dk
