Denmark: Economic growth stronger than expected in Q4, GDP in 2014 up for the first time in three years
February 27, 2015
In the fourth quarter, the economy expanded a seasonally-adjusted 0.4% over the previous quarter, according to data release by Statistics Denmark (DST) on 27 February. The reading was down slightly from the 0.5% expansion tallied in the previous quarter but overshot market expectations of a flat reading. Stronger growth in private consumption, fixed investment, and exports was offset by a slowdown in government consumption. In annual terms, GDP rose 1.3%, which was above the 1.1% expansion observed in the previous quarter.
Private consumption rebounded from a 0.1% contraction over the previous quarter in Q3 to a 0.7% expansion in Q4. In addition, fixed investment accelerated, rising 1.6% in Q4 (Q3: +1.1% quarter-on-quarter). However, government consumption deteriorated from a 0.6% expansion in Q3 to a flat reading in Q4.
Exports of goods and services expanded 0.8% in Q4 over the previous quarter, which was greater than Q3’s 0.4% increase. Imports rose 0.2%, which was below Q3’s 0.8% increase. As a result, the external sector’s net contribution to overall economic growth improved from minus 0.2 percentage points in Q3 to a plus 0.3 reading in Q4.
For the full year 2014 the economy expanded 1.0%, which marked the first positive reading after two years of a contracting GDP.
Author: Carl Kelly, Economist