Denmark's central bank warns of inflation shock if Middle East conflict drags on

In a scenario where oil and gas supplies remain restricted at the Strait of Hormuz, the central bank sees inflation rising to 4.5 percent this year, compared with the 1.8 percent currently forecast.

The growth forecast for 2026 is being revised down to 1.8 percent from 2.0 percent. If the conflict is not resolved, the central bank warns that growth could fall by another 0.7 percentage point.