Denmark Economic Forecast

Denmark Economic Outlook

September 25, 2018

The economy lost some steam in the second quarter from Q1’s downwardly-revised, already-modest performance, largely due to a deceleration of private consumption growth coupled with a slight contraction of exports and government spending. This was despite strong consumer confidence and near decade-low unemployment in the quarter. More positively, fixed investment recorded robust growth in Q2—even when excluding large, likely one-off, ship purchases. Looking to the third quarter, business confidence remained positively anchored in August, suggesting that the strong investment performance will continue in Q3. In addition, after weak readings throughout Q2, the manufacturing PMI increased sharply in July and again in August, indicating a large rebound of manufacturing activity that will likely buttress higher investment. At the end of August, the government presented a fiscally cautious draft 2019 budget, which set aside money to deal with potential Brexit fallout.

Denmark Economic Growth

Private consumption, supported by a healthy labor market and low inflation, should continue driving growth going forward. A rapidly degrading trade environment and the uncertain fate of the UK—one of Denmark’s largest trading partners—under Brexit pose downside risks. FocusEconomics panelists expect GDP to increase 1.2% in 2018. For 2019, the panel projects growth of 1.9%, unchanged from last month’s estimate.

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Denmark Facts

Bond Yield0.45-1.54 %Oct 12
Exchange Rate6.45-0.57 %Oct 12
Stock Market895-0.39 %Oct 12

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