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Denmark GDP Q1 2024

Denmark: Danish economy contracts at sharpest pace since Covid-19 in Q1

According to a preliminary estimate, the Danish economy was notably set back in the first three months of 2024, with GDP declining 1.8% on a seasonally adjusted quarter-on-quarter basis, a notable deterioration from the prior quarter’s 2.7% increase. Q1’s downturn was the worst since the onset of the Covid-19 pandemic in Q1 2020.

Meanwhile, year-on-year GDP growth cooled to 0.2% in Q1 (Q4: +3.5% yoy).

The downturn chiefly reflected a deterioration in private consumption and exports. More positively, public spending and fixed investment improved. Household spending contracted 1.8% in seasonally adjusted quarter-on-quarter terms in Q1, contrasting Q4’s 2.1% increase and reflecting a fall in car purchases. Conversely, government consumption growth accelerated to 1.9% (Q4 2023: +0.2% s.a. qoq), and fixed investment rebounded, increasing 5.0% (Q4 2023: -6.8% s.a. qoq).

Turning to the external sector, exports of goods and services declined 4.8% in Q1, deteriorating from the prior three months’ 8.0% growth. This was largely attributed to a fall in exports of services, particularly of sea transport amid increased freight costs. Conversely, imports of goods and services growth waned to 0.8% in the three months to March, decelerating from the prior quarter’s 2.1% rise.

Our Consensus is for GDP to return to growth in sequential terms in Q2 and accelerate slightly in H2. Moreover, our panelists have upped their 2024 GDP growth forecasts since the start of the year and now see the economy expanding at a stronger pace than in 2023, largely thanks to improving consumer spending. That said, the performance of the pharmaceutical industry remains a key two-sided risk to the outlook.

A second national accounts data release for Q1 will be published on 28 June.

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