Economists downplay December Dankort spending as upswing indicator

Increased Dankort figures don’t necessarily mean corresponding private consumption

Economists: We shouldn't get overly optimistic (photo: iStock) Economists: We shouldn't get overly optimistic (photo: iStock)
January 8th, 2016 5:00 pm| by Philip Tees

Economists are warning that significant increases in Danes’ use of the payment card Dankort in December do not necessarily equate to there being a full swing in private consumption, Berlingske Business reports.

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Figures from the digital payment provider Nets show that Dankort transactions in December amounted to 36.8 billion kroner, which represents an increase of 8.3 percent in relation to December 2014.

Dankort popularity and mobile payment also factors
However, Helge Pedersen, the chief economist at Nordea, highlighted that Dankort’s popularity as a payment method is also a factor in the increase.

“The increase is significant, but before we become overly optimistic and see a corresponding increase in private consumption, we must not forget there is a tendency for Danes to use the Dankort more and more as a method of payment,” he said.

What’s more, the use of mobile payment solutions, such as Danske Bank’s Mobilepay, also skews the numbers. Mobilepay transfers are technically Dankort transactions, even when people transfer money to one another, as opposed to making a purchase.

“When it is corrected for this, the growth in Dankort use that is attributable to economic activity was just over 4 percent. This is less ostentatious, but very solid,” Pedersen said.

Las Olsen, the chief economist at Danske Bank, was also more conservative in his assessment of the apparent upswing.

“For the fourth quarter as a whole, the Dankort figures suggest an increase in consumption of 0.4 percent, which is certainly good, but not a drastic upswing and also a bit less than the increase in the third quarter,” he said.