Denmark: GDP slows in Q3
November 29, 2013
In the third quarter, GDP expanded 0.4% over the previous quarter in seasonally and working-day adjusted terms, according to a preliminary estimate released on 29 November. The figure was a slight decrease compared to the 0.6% expansion recorded in the second quarter, but it did overshoot the 0.3% expansion the market had expected.
The Q3 result was driven by a deterioration in both domestic demand and in the external sector of the economy. Total consumption decelerated from a 0.3% increase in Q2 to a 0.1% rise in Q3. Private consumption contracted 0.1% (Q2: 0.0% quarter-on-quarter), while government consumption increased 0.6% (Q2: +0.7% qoq). Fixed investment, however, accelerated significantly, increasing from a 1.0% expansion in Q2 to a 3.9% rise in Q3.
On the external side of the economy, exports of goods and services rose 0.9% in the third quarter, down from the 1.7% expansion in the second quarter. Conversely, imports accelerated from a 0.2% expansion in Q2 to a 3.0% rise in Q3. The external sector's net contribution to overall economic growth fell from plus 0.8 percentage points in the second quarter to minus 1.3 percentage points in the third quarter.
The government expects the economy to expand 0.2% in 2013 and 1.6% in 2014. The Central Bank estimates that growth will be 0.3% this year and 1.6% in 2014. FocusEconomics Consensus Forecast panelists are more optimistic and expect economic growth to reach 0.8% in 2013, which is down 0.1 percentage points from last month's forecasts. For 2014, panelists expect an expansion of 1.5%, which is up 0.1 percentage points from last month's estimate.
Author: Dirina Mançellari, Senior Economist