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Denmark Economic Forecast

Denmark Economic Outlook

The economy grew at quicker-than-initially-estimated quarterly and annual paces in Q2. That said, quarter-on-quarter growth more than halved from Q1 due to softer growth of public spending and exports of goods and services. More positively, private consumption growth doubled in Q2 from Q1 to reach the strongest reading since Q4 2021; softer inflation and higher employment supported the acceleration. Moving to Q3, quarterly growth is set to slow marginally. Both goods imports and retail sales declined month on month in July, suggesting a slowdown in household spending. That said, consumer and business sentiment improved in July–August from Q2—despite remaining pessimistic—likely due to receding consumer and core inflation and a steeper year-on-year decline in producer prices in the same two-month period.

Denmark Inflation

Headline inflation dropped to a near two-year low of 2.4% in August (July: 3.1%). Similarly, core inflation softened to 4.2% in the same month (July: 5.3%). In the final months of the year, headline inflation should drop further from current levels on high interest rates. Overall, in 2023, inflation will average lower than in 2022 but remain above the ECB’s 2.0% target.

This chart displays Economic Growth (GDP, annual variation in %) for Denmark from 2013 to 2022.

Denmark Economic Data

2018 2019 2020 2021 2022
Population (million) 5.8 5.8 5.8 5.8 5.9
GDP (USD bn) 357 346 355 405 400
GDP per capita (USD) 61,701 59,672 60,952 69,421 68,122
GDP (EUR bn) 302 310 311 343 381
GDP per capita (EUR) 52,295 53,311 53,467 58,726 64,810
GDP (DKK bn) 2,253 2,311 2,321 2,551 2,832
Economic Growth (Nominal GDP, ann. var. %) 2.8 2.6 0.4 9.9 11.0
Economic Growth (GDP, ann. var. %) 2.0 1.5 -2.4 6.8 2.7
Domestic Demand (ann. var. %) 2.7 0.5 -0.3 7.4 -0.3
Private Consumption (ann. var. %) 3.5 1.6 -1.4 5.5 -1.4
Government Consumption (ann. var. %) 0.0 0.8 -1.7 4.6 -2.8
Fixed Investment (ann. var. %) 4.2 -1.3 4.3 6.6 3.2
Exports (G&S, ann. var. %) 3.4 4.5 -6.1 7.7 10.8
Imports (G&S, ann. var. %) 5.1 3.0 -2.8 8.8 6.5
Industrial Production (ann. var. %) 2.0 2.7 -5.5 8.3 15.1
Retail Sales (ann. var. %) 1.6 0.6 3.7 3.9 -5.0
Disposable Income (ann. var. %) 1.6 1.2 -0.9 9.1 3.5
Wages (ann. var. %) 2.2 2.0 1.9 2.3 2.9
Unemployment (% of active population, aop) 5.2 5.0 5.6 5.1 4.5
Fiscal Balance (% of GDP) 0.8 4.2 0.4 4.1 3.5
Public Debt (% of GDP) 34.0 33.7 42.3 36.0 29.7
Inflation (CPI, ann. var. %, eop) 0.8 0.8 0.5 3.1 8.7
Inflation (CPI, ann. var. %, aop) 0.8 0.8 0.4 1.9 7.7
Inflation (Core, ann. var. %, aop) 0.7 0.8 0.9 1.1 4.7
Inflation (PPI, ann. var. %, aop) 4.3 -0.6 -2.7 13.6 28.9
Certificates of Deposit Rate (%, eop) -0.65 -0.75 -0.60 -0.60 1.75
3-Month CIBOR (%, eop) -0.28 -0.40 -0.23 -0.28 2.45
10-Year Bond Yield (%, eop) 0.22 -0.17 -0.46 0.05 2.71
Stock Market (ann. var. of KAX all-share %) -13.0 27.4 29.0 27.2 -1.5
Exchange Rate (DKK per USD, eop) 6.53 6.66 6.08 6.54 6.97
Exchange Rate (DKK per USD, aop) 6.32 6.67 6.54 6.29 7.08
Exchange Rate (DKK per EUR, eop) 7.46 7.47 7.44 7.44 7.44
Exchange Rate (DKK per EUR, aop) 7.45 7.47 7.45 7.44 7.44
Current Account Balance (EUR bn) 22.0 26.2 25.2 31.3 50.9
Current Account Balance (% of GDP) 7.3 8.5 8.1 9.1 13.4
Merchandise Trade Balance (EUR bn) 5.8 11.2 8.8 4.3 2.6
Foreign Direct Investment (EUR bn) -2.2 24.1 1.4 4.1 4.2

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