Denmark GDP Q2 2016


Denmark: Denmark's GDP expands at slower pace in Q2

August 31, 2016

In Q2, the Danish economy grew a seasonally-adjusted 0.5% over the previous quarter, according to preliminary data released by Statistics Denmark (DST) on 31 August. The reading came in below the 0.7% expansion in Q1 but was in line with market expectations. Weaker private consumption and fixed investment drove the deceleration, while the external sector performed better than in Q1 and public spending picked up. In annual terms, GDP rose 1.1%, which marked a turnaround over the 0.3% decrease seen in Q1.

Private consumption slowed from Q1’s 0.5% increase to a modest 0.2% expansion in Q2. By contrast, growth in public spending strengthened from Q1’s 0.9% to an eight-year high of 1.2% in Q2. Fixed investment was a weak spot, as it swung from a 0.6% expansion in Q1 to a 0.9% contraction in Q2.

On the external side of the economy, exports of goods and services expanded 0.8% over the previous quarter, which followed the 0.5% increase seen in Q1. Imports fell 0.7%, which represented a deterioration over the 0.2% increase in Q1. As a result, the external sector’s net contribution to overall economic growth rose from 0.2 percentage points in Q1 to 0.8 percentage points in Q2, the largest contribution since Q1 2015.

The Central Bank expects GDP to grow 1.0% in 2016 and 1.6% in 2017. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.1% this year, which is up 0.1 percentage points from last month’s estimate. Next year, the panel sees the economy accelerating to 1.6%.

Author: Teresa Kersting, Economist

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