PRICE TRENDS
Consumer Prices
The annual increases in consumer prices are shown in Figure 1. For more details on consumer prices, see Table 1 and Table 2.
Seen over a longer period, price increases in Greenland follow developments in Denmark very closely as shown in Figure 2. The reason, of course, is that many goods are imported from Denmark.
Figure 1
Annual Increases in the Consumer Price Index
Source: Statistics Greenland and Statistics Denmark
Figure 2
Annual Change in the Consumer Price Index for Denmark and Greenland
Source: Statistics Greenland
Construction Cost Index
The development in the
cost of house building and details on the construction costs are shown in Table 3.
Price Comparison Between Greenland and Denmark
When comparing prices in Greenland and in Denmark, several things must be kept
in mind: In Greenland no VAT is collected but high taxes apply to goods such as
spirits and tobacco while 25 per cent VAT is collected on almost all goods and
services in Denmark. On the other hand, there are significant costs connected
with shipping goods to Greenland. The conditions for competition on the markets
also play a role.
In 1994, Statistics
Greenland and Statistics Denmark carried out a comprehensive survey of prices
in Greenland and Denmark. The result is shown in Figure 1.
Overweiv 1
Price Ratio Between Greenland and Denmark in 1994
|
Weights in Greenland |
Price index with Greenlandic weights |
Price index with Danish weights |
Total price index |
|
|
|
(DKK million) |
|||
|
Private consumption |
3.700 |
131 |
119 |
125 |
|
Food, beverages, and tobacco |
1.485 |
147 |
159 |
153 |
|
Clothing and footwear |
151 |
104 |
105 |
105 |
|
Housing, fuel etc. |
801 |
105 |
102 |
104 |
|
Furnishings etc. |
183 |
115 |
113 |
114 |
|
Medicine, medical expenses etc. |
4 |
96 |
96 |
96 |
|
Transport and communication |
365 |
175 |
111 |
139 |
|
Leisure equipment and entertainment |
229 |
116 |
117 |
116 |
|
Other goods and services |
353 |
117 |
116 |
117 |
|
Tourist balance |
104 |
100 |
100 |
100 |
|
Unions, organisations etc. |
28 |
104 |
106 |
105 |
|
Public spending |
3.241 |
104 |
106 |
105 |
|
Fixed gross investments |
1.627 |
112 |
111 |
112 |
|
Stock increases |
-100 |
100 |
100 |
100 |
|
Trade balance |
-2.007 |
100 |
100 |
100 |
|
Gross domestic product |
6.461 |
123 |
113 |
118 |
Source: Statistics Greenland, national accounts
The figure shows that the price level for private consumption was 25 per cent higher in Greenland than in Denmark. A major reason for this was (and is) the high taxes on beer, wine, spirits, and tobacco in Greenland.
The overall price level in 1994 in connection with public consumption was 18 per cent higher in Greenland than in Denmark.