Statements cover, for example, Danmarks Nationalbank’s feature articles and opinion pieces published in the media, comments on reports from the Economic Council and comments on political proposals and decisions.

Danmarks Nationalbanks comments on the Economic Councils discussion paper autumn 2016

​In general, the Chairmanship's assessment of the economic position and the short-term outlook shows the same pattern of gradually higher GDP growth rates as Danmarks Nationalbank's projection, but forecasts of growth in both GDP and employment are on the optimistic side.


​In general, the Chairmanship's assessment of the economic position and the short-term outlook shows the same pattern of gradually higher GDP growth rates as Danmarks Nationalbank's
projection, but forecasts of growth in both GDP and employment are on the optimistic side.


The output gap will not close until after 2020, whereas Danmarks Nationalbank expects it to close somewhat sooner. This is partly because the Chairmanship anticipates stronger growth in the structural labour force in the coming years. If this increase does not materialise or materialises
only partly, economic growth can be expected to flatten and be limited to contributions from productivity.


The Chairmanship expects increases in house prices to slow down in 2017 as a result of weaker price developments in Copenhagen. More specifically, growth in house prices is forecast at 1.6 per cent in 2017, compared with Danmarks Nationalbank's forecast of 3.1 per cent. This could be be-cause the Chairmanship assumes somewhat faster increases in interest rates. Danmarks National-bank has underscored the need for closer monitoring of the Copenhagen housing market in
particular. Here, there is a risk that prices may be pushed up by speculative purchases, entailing that prices do not exclusively reflect underlying economic fundamentals.


There is an urgent need to replace the current system of frozen or capped property taxes. Given its procyclical impact, it exacerbated the overheating up to 2008 and the subsequent downturn, and since then it has increased regional differences between actual tax rates and hence also house prices. The government's proposal for a new housing taxation system and new property valua-tions includes positive elements. The core element is the proposal to restore, from 2021, the link between housing taxes and housing values that existed until 2001. Decoupling of taxes and
housing values has been a deviation from the principles of the general tax freeze, which has
applied to the percentage rate of taxation. For example, the income tax paid has increased when people have earned more and decreased when people have earned less. The proposal includes suggestions for transitional arrangements and postponement that are rather expensive and
complex. This does not undermine the necessary stabilisation element, but can be seen as a
question of fiscal policy and distribution priorities.


Danmarks Nationalbank encourages the parties in the Danish parliament – the Folketing – to
conclude a broad-based and lasting agreement on future housing taxes that will ensure the
restoration of the link between housing taxes and housing values.