Denmark: Flash estimate suggests economy lost momentum in the second quarter
August 14, 2018
According to a flash estimate released on 14 August, GDP rose 0.3% in seasonally adjusted quarter-on-quarter terms in the second quarter, which if confirmed would mark a deceleration from Q1’s 0.4% increase. However, the preliminary reading should be treated with caution, with Statistics Denmark estimating uncertainty regarding Q2’s final reading to be at least plus/minus 0.5 percentage points. In year-on-year terms, the economy rebounded from a 0.6% contraction in Q2 to expand 0.8% in Q2.
According to Statistics Denmark, services and trade drove growth. The service sector was likely supported by the strong labor market, with the unemployment rate dipping to a multi-year low in June, while trade was likely driven by healthy regional economic activity. However, the prolonged period of warm weather dampened the performance of the agricultural sector, while the mining and quarrying sector subtracted from growth.
Despite recent subdued quarter-on-quarter growth, economic fundamentals are solid. Going forward, the economy should be supported by solid gains in private consumption, fixed investment, and exports.
Comprehensive Q2 GDP figures will be published on 31 August.
Author: Oliver Reynolds, Economist