24 September 2025
Danmarks Nationalbank downgrades expectations for growth in the Danish economy in a new projection. Nationalbanken now expects Denmark's gross domestic product, GDP, to grow by 2 per cent this year and next year and 1.7 per cent in 2027. In its last projection in March, the bank expected the Danish economy to grow by 3.6 per cent this year, 2.3 per cent next year and 2 per cent in 2027.
"The significantly lower growth reflects several factors. First and foremost, Statistics Denmark's recently revised estimate of historical GDP provides a weaker starting point for growth in 2025. Also, growth has been flat overall in H1. We also expect to see a negative impact from higher tariffs – both directly through lower exports to the US and indirectly because of lower growth in our other export markets that are also affected by higher tariffs. Finally, growth in the Danish pharmaceutical industry is also expected to be lower than in previous years," says Christian Kettel Thomsen, Governor of Danmarks Nationalbank.
According to Nationalbanken, there are prospects for a balanced growth path in the Danish economy. The pressure on capacity in the Danish economy is estimated to be approximately neutral. Despite soaring food prices, overall inflation is expected to remain low in the coming years and consumer purchasing power will continue to grow.
The Danish government's proposed 2026 Finance Act includes plans to significantly ease fiscal policy. This is due to the increase in defence spending and new political priorities such as an increase in government consumption in the financial agreements with municipalities and regions and the reduction of several taxes, including the electricity tax.
The extent to which the easing will increase capacity pressure depends on how much and how quickly defence spending is raised, how much money is spent domestically and how much is spent on e.g. buying military equipment from abroad.
"The government plans to ease fiscal policy significantly. However, there is considerable uncertainty about the impact of fiscal policy on capacity pressure over the next few years. If capacity pressure in Denmark increases noteworthy, it should be offset by fiscal measures that reduce it," says Christian Kettel Thomsen.
Inflation is expected to be 1.9 per cent this year, 1.1 per cent in 2026 and 1.8 per cent in 2027. Inflation is affected by a number of changes in taxes on e.g. electricity, which will reduce inflation by around 3/4 percentage points in 2026. Core inflation, which is not affected by the tax changes on electricity, is expected to be 1.8 per cent in 2025, 1.7 per cent in 2026 and 1.7 per cent in 2027.
On Wednesday, Danmarks Nationalbank also released analyses on food prices, defence spending, the output gap and monetary and financial trends. The analyses can be found at www.nationalbanken.dk.
Press enquiries can be directed to Communications and Press Officer Teis Hald Jensen by phone +45 3363 6066 or email tehj@nationalbanken.dk.