Denmark GDP Q2 2016


Denmark: Economy slows in Q2

September 30, 2016

In the second quarter, GDP expanded a revised seasonally-adjusted 0.4% over the previous quarter (previously reported: +0.5% quarter-on-quarter), according to data released by Statistics Denmark (DST) on 30 September. The reading marked a slowdown compared to Q1’s 0.7% expansion. The deceleration was driven by a contraction in fixed investment and weaker private consumption. In annual terms, GDP grew 0.8% in Q2, rebounding from Q1’s 0.3% drop.

Concerning the domestic economy, private consumption growth slowed from 0.6% in Q1 to 0.4% in Q2. By contrast, public spending strengthened from Q1’s 0.8% rise to a remarkable 1.3% expansion in Q2, which marked the fastest pace of growth since Q4 2007. Fixed investment deteriorated from Q1’s 0.4% rise to a 1.2% contraction in Q2.

On the external side of the economy, exports of goods and services grew 1.2% over the previous quarter, improving from the 0.7% increase seen in the previous quarter. Imports growth also picked up, albeit to a lesser extent, accelerating from 0.2% in Q1 to 0.3%. As a result, the external sector’s net contribution to overall economic growth increased from 0.2 percentage points in Q1 to 0.4 percentage points in Q2, which represented the largest contribution since Q1 2015.

The Central Bank expects GDP to grow 1.0% in 2016 and 1.6% in 2017. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.0% this year, which is down 0.1 percentage points from last month’s estimate. Next year, the panel sees the economy accelerating to 1.4%.

Author: Teresa Kersting, Economist

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