Denmark: GDP posts stronger-than-anticipated expansion in Q2
A second national accounts release confirmed that the economy rebounded in the second quarter of 2022 and avoided a technical recession, thanks to the removal of Omicron-related Covid-19 restrictions. GDP expanded 0.9% on a seasonally-adjusted quarter-on-quarter basis. The reading was an improvement from Q1s 1.1% contraction, as well as from the preliminary estimate of 0.7% growth. Meanwhile, on an annual basis, economic growth moderated to 3.6% in Q2, below Q1s 5.2% expansion and also down from the preliminary estimate of a 4.4% increase.
Domestically, the strong quarterly rebound was chiefly due to government consumption bouncing back, growing 0.5% in Q2 (Q1: -1.9% s.a. qoq). Additionally, household spending fell 0.6% in the second quarter, which was above the first quarter’s 2.5% contraction. The improvement in both the employment and the unemployment rates partly offset elevated inflation in the period and likely prevented a sharper decline. In contrast, fixed investment slid at a more pronounced rate of 1.2% in Q2, contrasting the 2.6% expansion logged in the previous quarter.
The external sector likely detracted from overall growth; exports of goods and services increased 0.7% on a seasonally-adjusted quarterly basis in the second quarter, which contrasted with the first quarter’s 1.1% contraction. Similarly, imports of goods and services rebounded, growing 0.8% in Q2 (Q1: -2.2% s.a. qoq).