Denmark Economic Forecast

Denmark Economic Outlook

September 1, 2020

The economy dived at a record pace in the second quarter according to the flash estimate, resulting from strict lockdown measures imposed to contain the pandemic. A deteriorated labor market weighed on activity in Q2, although the unemployment rate marginally improved in June. On a brighter note, exports fell at a much slower pace and retail sales increased strongly in June, likely pointing to a recovery in domestic and foreign consumer demand at the end of Q2 after most restrictions were eased. Looking ahead, a rebound is expected in Q3. The manufacturing PMI climbed in July, suggesting that a recovery in the manufacturing sector is underway. Moreover, the re-opening of borders should bode well for the tourism sector, although a surge of Covid-19 cases in early August risks tighter restrictions in the future.

Denmark Economic Growth

The economic downturn this year is set to be pronounced, although robust fiscal and monetary stimulus will help to temper the decline. Soft consumer confidence and a higher unemployment rate will drag on private consumption, while uncertainty over the global trade recovery poses a downside risk for exports. FocusEconomics analysts see the economy contracting 4.9% in 2020, which is up 0.2 percentage points from last month’s forecast, before growing 4.0% in 2021.

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Denmark Facts

Value Change Date
Bond Yield-0.15-1.54 %Jan 01
Exchange Rate6.66-0.57 %Jan 01

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