Denmark Economic Forecast

Denmark Economic Outlook

April 30, 2018

Leading indicators suggest the economy was on firm footing in the first quarter. It was likely buoyed by robust consumption growth reflecting solid gains in households’ purchasing power, and a solid showing of the industrial sector. Retail sales in the quarter recorded their best performance since 2016, and consumer confidence remained elevated. Moreover, the average PMI reading from January to March was at the highest level on record, signaling robust expansion of industrial activity despite subdued output growth in February. Notably, recent data showed Denmark's tight labor market kept adding jobs at a strong pace in the quarter, boding well for wage growth going forward. However, seasonally-adjusted merchandise exports fell for the third consecutive month in February amid timid demand from Europe. Moreover, the current protracted wage sector dispute in the public sector threatens to disrupt the economic momentum if no agreement is reached before the new 8 May deadline, and it was likely the cause of a dip in consumer confidence in April.

Denmark Economic Growth

Robust household consumption, buoyed by higher wage growth as well as prolonged low interest rates and inflation, should buttress the expansion this year, while high global growth should support industrial activity and the external sector. However, elevated household debt will keep weighing on spending, and the tight labor market risks leading to shortages of skilled workers in the medium-term. Met the why particular panelists expect GDP to expand 1.8% in 2018, unchanged from last month’s estimate. For 2019, the panel projects growth of 1.9%.

Denmark Economy Data

20132014201520162017
Population (million)5.65.65.75.75.7
GDP per capita (USD)61,11962,70753,63853,879-  
GDP (USD bn)342353304307-  
Economic Growth (GDP, annual variation in %)0.91.71.61.7-  
Consumption (annual variation in %)0.70.82.22.0-  
Investment (annual variation in %)2.73.52.55.6-  
Exports (G&S, annual variation in %)1.63.61.82.5-  
Imports (G&S, annual variation in %)1.53.61.33.5-  
Industrial Production (annual variation in %)2.53.41.13.5-  
Retail Sales (annual variation in %)-1.21.21.10.8-  
Unemployment Rate5.64.94.54.2-  
Fiscal Balance (% of GDP)-1.01.4-1.3-0.9-  
Public Debt (% of GDP)44.044.039.637.8-  
Money (annual variation in %)3.27.711.37.5-  
Inflation Rate (CPI, annual variation in %, eop)0.70.40.5-  -  
Inflation Rate (CPI, annual variation in %)0.80.60.50.3-  
Inflation (PPI, annual variation in %)0.60.0-  -  -  
Policy Interest Rate (%)0.200.200.050.05-  
Stock Market (annual variation in %)28.017.6-  -  -  
Exchange Rate (vs EUR)7.467.457.467.43-  
Exchange Rate (vs EUR, aop)7.467.457.467.45-  
Current Account (% of GDP)7.88.89.17.9-  
Current Account Balance (USD bn)26.731.227.724.3-  
Trade Balance (USD billion)13.211.19.29.3-  

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Denmark Facts

ValueChangeDate
Bond Yield0.60-1.54 %May 21
Exchange Rate6.32-0.57 %May 21
Stock Market1,000-0.39 %May 18

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