15 March 2017
"The steady growth in the gross domestic product (GDP) and employment since 2012 emphasises that the Danish economy is in an upswing. The economy is gradually entering a boom, but growth will be lower than in previous booms."
That is the message from Governor Lars Rohde in connection with the publication of a new analysis of the Danish economy.
The high growth rates of previous periods are not likely to return, due to structural factors. The expected scenario assumes that the labour supply will increase as a result of reforms already implemented.
"If growth is to be boosted, this requires new reforms to increase the supply of labour as well as productivity," says Lars Rohde, who believes that fiscal policy should not stimulate demand further.
GDP growth is expected to rise to 1.6 per cent in 2017 from 1.1 per cent in 2016. An increase of 1.6 per cent is also expected for 2018 and 2019. This is slightly higher than in the projection from December.
The growth outlook may be influenced by developments and events elsewhere in the world. For example, expansionary fiscal policy in the USA could strengthen Danish exports to the USA in the short term, but sudden interest rate increases could impact the rest of the world – and thus also Danish exports negatively. In the Danish economy, the main potential cause of fluctuation is the risk of an insufficient supply of labour.
Enquiries can be directed to Ole Mikkelsen, tel. +45 3363 6027.