20 March 2019
The Danish economy is booming. Some sectors are experiencing labour shortages, but wages are still increasing only moderately. Economic growth is expected to continue at a slightly slower pace in the coming years. Strong economic balances give reasons to believe that the boom will not be followed by a deep recession as seen in the 2000s.
That is Danmarks Nationalbank's conclusion in a new projection of the Danish economy, which forecasts growth in the gross domestic product, GDP, of 1.7 per cent this year and next year, while it is expected to be 1.6 per cent in 2021.
"Economic policy has contributed to balanced growth during the boom. It is important that this continues and to stick to the reforms already implemented. The Danish economy is still booming, so lower growth in the coming years does not call for easing of fiscal policy," says Governor Lars Rohde, Danmarks Nationalbank.
Most recently, the global economy has slowed a little, and the risk of a further slowdown has increased. Generally, the Danish economy is well prepared for an international slowdown. And if the UK's exit from the EU ends with a hard Brexit, it is likely to have a limited impact on the Danish economy as a whole, although some industries will be considerably affected.
"Danish firms and households both have considerable savings, and the public economy is sound, making the Danish economy resilient to lower foreign demand. Even somewhat weaker growth abroad is not likely to push the Danish economy into a deep recession," says Lars Rohde.
The good news continues in the labour market. Employment has increased by more than 225,000 persons since the upswing gained momentum in 2013, mainly in the private sector. This has pushed up wage growth a little, but Danish firms remain competitive.
Enquiries can be directed to press advicer Ole Mikkelsen on tel. +45 3363 6027.