Danmarks Nationalbank has published its assessment of the cyclical position of the Danish economy. Economic activity increased by 0.4 per cent in 2013. Growth has been uneven. The growth rates for the 2nd and 3d quarters were revised upwards, while in the 4th quarter GDP contracted by 0,5 per cent according to Statistics Denmark's preliminary figures.
"Growth in Denmark's GDP often fluctuates considerably from one quarter to the next. So it is important not to focus only on growth in a single quarter, but to maintain a broad perspective when assessing the economic situation," says Governor Lars Rohde, Danmarks Nationalbank.
Danmarks Nationalbank has not changed its assessment of the economy since the last projection from December 2013. Looking ahead, growth is expected to be moderate. There are positive signs in the labour market and parts of the housing market, and confidence among both consumers and firms has improved over the last year. Combined with the low level of interest rates and a substantial savings surplus in the private sector, this provides a basis for a self-sustaining upswing with continued growth in domestic demand. In addition, the outlook for Denmark's largest export markets is favourable. By the end of 2016, the capacity situation of the Danish economy is forecast to be back to normal.
"If we are to ensure higher, sustainable growth in the future, structural reforms are required with a view to increasing productivity in Denmark," says Governor Lars Rohde.
DANMARKS NATIONALBANK'S PROJECTION
Danmarks Nationalbank's new projection is virtually unchanged compared with the projection from December 2013. Danmarks Nationalbank forecasts GDP growth of 1.4 per cent in 2014 and 1.7 per cent in 2015. In 2016, which is included in the projection for the first time, growth is forecast at 1.9 per cent. Compared with the December projection, this is 0.1 percentage point lower for 2014 and 0.1 percentage point higher for 2015.
The annual increase in the Harmonised Index of Consumer Prices, HICP, is forecast at 1.2 per cent in 2014, 1.7 per cent in 2015 and 1.8 per cent in 2016. Compared with the December projection, the forecast is 0.6 percentage point lower for 2014 and 0.1 percentage point lower for 2015. The forecast for 2016 is included for the first time.
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