The IMF's analyses of the Danish economy

Abstract icon Following its recent Article IV mission in Denmark the International Monetary Fund, IMF, concludes that Denmark has successfully navigated through the crisis due to a strong and swift fiscal policy response and the fact that Denmark entered the pandemic on a solid economic footing. Going forward, the IMF recommends that economic policies continue to support the recovery while also facilitating a green and digital transition. At the same time the IMF recommends targeted polies to mitigate risks related to accelerating house price increases amid high and increasing household leverage.
Every year, a team of IMF economists visits Denmark to analyse the Danish economy. Half a year in advance, the IMF makes preparatory visits, known as interim visits. This is part of the IMF's surveillance of its member countries' economic development. During the visit, the IMF meets with relevant ministries, advisory bodies, trade and industry associations, and private sector participants. Among other things, the IMF's analysis includes recommendations for reforms of the national economy and is summarised in an Article IV report, which is compulsory according to article IV the IMF's Articles of Agreement, hence the name.

Since 1999, the IMF has prepared in-depth analyses of the financial system in connection with its Financial Sector Assessment Program (FSAP). The purpose is to reduce the risk of crises in the international financial markets. Since the financial sector in Denmark has been assessed to be systemically important in the international financial system, Denmark will undergo the FSAP approx. every 5 years.

In its recent FSAP report, the IMF finds that the resilience of the Danish financial system has been strengthened since its most recent analysis from 2014. This is attributable mainly to the activation of macroprudential instruments, improved supervision of banks and insurers, and strengthened crisis management frameworks.