Denmark: Growth moderates in Q3 but remains solid
November 15, 2021
Economic activity was robust in the third quarter, according to a preliminary release. The economy continued to grow, with GDP expanding 2.0% in seasonally-adjusted quarter-on-quarter terms, following Q2’s 2.8% increase. Meanwhile, on an annual basis, growth clocked in at 5.4% in Q3, moderating from the previous quarter’s 9.8% bounce-back. That said, the result still marked the second-strongest rise since Q4 1994.
The quarterly result was largely due to the removal of all remaining domestic Covid-19 restrictions, which supported activity in the period. Thus, services industries, including hotels, restaurants and travel agencies, showed the strongest performance. Moreover, industrial production grew for the fourth consecutive quarter. Meanwhile, employment levels continued to increase in the third quarter, with the employment indicator increasing 1.7%, which should have boosted household spending in the period.
A more detailed release will be published on 30 November.
Commenting on Q3’s performance, Elizabeth Mathiesen, senior strategist at SEB noted:
“The Danish economy started the second half of 2021 with a stronger-than-expected GDP growth of 2.0% in Q3, primarily driven by the reopening of the service sector. Denmark was thus among the first countries in the world to surpass its pre-pandemic GDP level, and the rapid reopening thus continued into the second half of the year, as the government removed all restrictions related to the pandemic as of September 10.”
Meanwhile, with regard to the outlook for the final quarter of the year, they added:
“The recent re-introduction of some containment measures following a spike in virus cases was less invasive than expected and will, in our view, have a limited effect on Q4 growth.”
Author: Marta Casanovas , Junior Economist