Denmark: Economy rebounds in Q1, grows at fastest pace in nearly four years
May 28, 2014
In the first quarter, the economy expanded a seasonally-adjusted 0.8% over the previous quarter according to more detailed data release on 30 June. The reading was slightly down from the 0.9% expansion reported in the preliminary estimate; however, it contrasted the 0.3% contraction tallied in the previous quarter. In addition, the expansion marked the fastest growth rate in more than three years. In annual terms, GDP grew 1.4%, which met the preliminary estimate and marked an improvement over the 0.7% expansion observed in the previous quarter.
Q1’s expansion came on the back of improving private consumption, which swung from a 1.1% contraction in Q4 to a 1.5% expansion in Q1—the fastest pace of growth since Q3 2007. In addition, fixed investment rose 3.6%, which contrasted the 2.9% contraction tallied in the previous quarter and reached the highest growth rate in nearly three years. Conversely, government spending contracted 1.1% in Q1 (Q4: +0.8% quarter-on-quarter).
Exports of goods and services rose 2.2% in the first quarter, which was well above the 0.1% increase recorded in Q4. In addition, imports rose 4.6% in Q1 (Q4: -2.9% qoq). As a result, the external sector’s net contribution to overall economic growth fell from plus 1.7 percentage points in Q4 to minus 1.5 percentage points in Q1.
Author: Dirina Mançellari, Senior Economist