Denmark: Economy contracts on depressed domestic sector
August 29, 2012
In the second quarter, GDP contracted 0.5% in seasonally adjusted terms over the previous quarter. The decline contrasted the 0.3% expansion seen in the first quarter and exceeded market expectations of a 0.1% contraction. On an annual basis, the economy contracted 0.9%, contrasting the 0.3% expansion registered in the first quarter. The contraction in Q2 came on the back of a depressed domestic sector, which offset healthy growth in the external sector. Gross fixed investment contracted a sharp 4.2% over the previous quarter, contrasting the 3.5% expansion observed in the January-March period. In addition, private consumption decreased 0.9% over the previous quarter, contrasting the 0.4% expansion recorded in Q1. The external sector, in contrast, improved as exports outpaced imports. Exports of goods and services rose 2.5%, bouncing back from the 0.6% contraction recorded in Q1, while imports decelerated to a mild 0.8% expansion in the second quarter (Q1: +1.2% qoq). Consequently, the external sector's net contribution to overall economic growth swung from a 1.0-point detraction in the first quarter to a 0.9-point contribution in the second.