COPENHAGEN (Reuters – Denmark’s economy may grow by 3.4% this year despite record inflation and the effects of war in Ukraine. The finance ministry stated on Thursday that the estimate was a substantial upwards revision to its March forecast.

“We emerged from 2021 at an exceptionally high rate with a strong starting point for continuing growth,” said Finance Minister Nicolai Walmen in a report that was published by the government on Thursday.

Wammen stated that although we should expect some slowing in Denmark’s economy this year, activity will still be strong.

Forecast is an upgrade of an estimate by ministry released in March. In that estimation, the economy was forecast to grow 1.6% in medium risk scenarios.

The ministry expects 2% economic growth in the event that the Russian supply to Europe is interrupted.

Government forecasts growth at 1.9% in 2023.

Inflation is expected to increase to 5.2% in the main scenario of the ministry, which was higher than its March forecast at 4.5%.

According to the Danish central banking, it was expecting that the economy would grow 2.1% by March.