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Denmark GDP Q1 2023

Denmark: Economy grows at softest pace in a year in the first quarter

A second national accounts release revealed the Danish economy tallied a 0.2% seasonally adjusted quarter-on-quarter expansion in the first quarter of 2023. The result came in below both the 0.5% growth recorded in Q4 2022 and the preliminary estimate of a 0.3% increase. Q1’s result was also the softest in a year.

Domestically, the quarterly slowdown was chiefly due to fixed investment contracting 13.7% in Q1, contrasting the 10.9% increase recorded in the previous quarter. Meanwhile, government spending declined at Q4’s rate of 0.3% in Q1. In contrast, household spending was the main engine of growth domestically; private consumption bounced back, growing 0.7% in seasonally adjusted quarter-on-quarter terms in the first quarter (Q4 2022: -0.1% s.a. qoq), which marked the best reading since Q3 2021. This rebound was likely the result of softer price pressures and a 0.4% increase in employment.

Meanwhile, exports of goods and services increased 4.1% on a seasonally adjusted quarterly basis in the first quarter, which contrasted the fourth quarter’s 1.0% contraction. Conversely, imports of goods and services deteriorated, contracting 2.5% in Q1 (Q4 2022: +3.1% s.a. qoq). Consequently, the external sector contributed positively to overall GDP growth.

On an annual basis, economic growth improved to 2.4% in Q1, from the previous quarter’s 1.6% increase. Q1’s reading was an improvement from the preliminary estimate of 2.2% growth.

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