Denmark: Economy contracts in Q4, grows slightly in 2013
February 28, 2014
In the last quarter of 2013, GDP contracted a seasonally-adjusted 0.5% over the previous quarter according to preliminary estimates released on 28 February. The figure contrasted both the 0.4% rise recorded in the third quarter and the 0.3% expansion the market had expected. Compared to the same quarter of the previous year, the economy grew 0.6% (Q3: +1.0% year-on-year). In the full year 2013, the economy grew 0.4% (2012: -0.4%).
Q4's result came primarily on the back of deteriorating total consumption, while external demand improved over the previous quarter. Private consumption fell 1.3% (Q3: -0.2% quarter-on-quarter), while government consumption decelerated from a 1.4% rise in Q3 to a 0.9% increase in Q4. In addition, fixed investment swung from a 1.9% increase in Q3 to a 2.4% fall in Q4.
Exports of goods and services fell 0.1% in the fourth quarter, which contrasted the 1.7% rise recorded in Q3. In addition, imports fell 2.7% in Q4 (Q3: +3.2% qoq). As a result, the external sector's net contribution to overall economic growth rose from minus 0.9 percentage points in Q3 to plus 1.5 percentage points in Q4.
The Central Bank estimates growth of 1.5% in 2014 and 1.6% in 2015. FocusEconomics Consensus Forecast panelists foresee economic growth of 1.4% in 2014, which is unchanged from last month's forecast. For 2015, panelists expect an expansion of 1.8%.
Author: Dirina Mançellari, Senior Economist