The Ukrainian crisis will drive up inflation and could cut Denmark's expected economic growth this year by 0.6-2.8 percentage points, the finance ministry said, Reuters reported.

The Danish economy was set to recover quickly from the pandemic this year, but the boom will now be undermined as the uncertainty surrounding the Ukraine crisis takes its toll.

Denmark's direct trade with Russia is limited. However, the Danish economy is also indirectly affected by countries such as Germany and Finland, which trade more with Russia, the ministry said in a statement.

The Danish Ministry of Economy forecasts growth of 2.2% this year under the mild scenario, 1.6% under the medium scenario and 0.0% under the hardest scenario, stressing that forecasts are still uncertain.

In December, the ministry forecast economic growth of 2.8% this year.

Inflation is expected to rise to 4.5% in the medium scenario, compared to 2.2% in the December forecast.

Denmark's central bank said last week that it expects the economy to grow 2.1% this year, compared to an earlier forecast of 3.1%.