Denmark: GDP accelerates in the first quarter
June 30, 2016
In the first quarter, GDP expanded a revised seasonally-adjusted 0.7% over the previous quarter (previously reported: +0.5% quarter-on-quarter), according to data released by Statistics Denmark (DST) on 30 June. The reading is above the 0.2% contraction tallied in the previous quarter and overshot market expectations of a 0.1% increase. The acceleration was driven by a strong expansion in exports and total consumption. In annual terms, GDP dropped 0.1% in Q1, which marked a slight decrease over the flat growth rate seen in Q4.
In Q1, private consumption increased 0.6%, which contrasted the weak growth observed in Q4. Moreover, government consumption rebounded to a 0.8% expansion in Q1 from the 0.7% contraction registered in the previous quarter, marking the strongest increase in over two years. In addition, fixed investment decelerated from a 1.5% expansion in Q4 to a 0.4% increase in Q1.
On the external side of the economy, exports of goods and services grew 0.7% over the previous quarter, marking an improvement over the flat reading seen in the previous quarter. Imports growth remained unchanged, which represented a deterioration over the 0.9% rise tallied in Q4. As a result, the external sector’s net contribution to overall economic growth increased from minus 0.5 percentage points in Q4 to plus 0.4 percentage points in Q1.
Author: Luis Lopez Vivas, Economist