23 September 2020
Economic activity has picked up in large parts of the Danish economy in line with the gradual reopening of society. Despite the rapid recovery, the economy is not back at the pre-coronavirus level, and the Danish economy is currently in a moderate recession.
This is Danmarks Nationalbank's conclusion in its new projection for the Danish economy, in which gross domestic product (GDP) is forecast to decrease by 3.6 per cent in 2020 as a whole as a result of the heavy economic downturn in the spring. The recovery of economic activity is expected to continue, but at a slower pace. GDP is forecast to increase by 3.6 per cent in 2021 and by 2.3 per cent in 2022. However, there is great uncertainty about the economic development, which will be strongly influenced by how the spread of the coronavirus develops in the coming period.
"The planned fiscal policy in the bill for next year's Finance Act is well aligned with the projected development. But we should be ready to both speed up and apply the brakes," says Lars Rohde, Governor of Danmarks Nationalbank.
Internationally, many countries are in deep recession. This dampen export opportunities for Danish firms. In addition, parts of the Danish economy are subject to restrictions, and there are prospects of a prolonged recovery.
"It's important that the various relief measures are phased out when, at some point, the restrictions which are limiting economic activity can be lifted. The measures help corporations with severely limited activity due to restrictions, but they hamper business sector dynamics and labour market mobility," says Lars Rohde.
Enquiries can be directed to press advicer Ole Mikkelsen on tel. +45 3363 6027.