Denmark: Denmark's GDP slows in Q4
November 30, 2016
Denmark’s economy finished the year on a slightly weaker note, growing a seasonally-adjusted 0.2% in Q4 over the previous quarter, according to preliminary data released by Statistics Denmark (DST). The reading came in below the revised 0.7% expansion in Q3 (previously reported: +0.4% seasonally adjusted quarter-on-quarter) as a contraction in government consumption and a pickup in imports dragged on the overall expansion. In annual terms, however, GDP rose 1.9%, which marked an acceleration from the 1.2% increase seen in Q3 and was the best performance in five quarters.
Private consumption rebounded strongly in Q4 on the back of rising disposable income and cheap credit, growing 1.5% (Q3: -0.1% q-o-q), an almost 11-year high. By contrast, growth in public consumption contracted 1.1% in Q4 after already falling 0.7% in Q3. Meanwhile, fixed investment increased 1.4%, accelerating from Q3’s robust 1.2% expansion, driven by rising residential investment in a booming real estate market.
On the external side of the economy, exports of goods and services jumped 4.1%, which followed the 0.9% increase seen in Q3, buttressed by improved activity in the maritime trade sector and higher prices for crude oil. Imports of goods and services grew 3.7%, which represented an increase over the 1.9% expansion in Q3, with consumers’ appetite for imports reflecting healthy household expenditure.
For 2016 as a whole, Denmark’s GDP grew 1.1%, which slightly overshot FocusEconomics panelists’ forecast of a 1.0% increase. Nonetheless, growth decelerated from 2015’s 1.6% increase and marked a three-year low.
Going forward, the economy is seen picking up steam on the back of solid private consumption and increasing petroleum prices, which will fuel North Sea oil exports. The robust momentum in the Euro area will also support a gradual acceleration.