Denmark: The economy rebounds in Q2 2022, avoiding a technical recession
Economic activity partly recovered from the spread of the Omicron variant and returned to growth in the second quarter of 2022, with GDP expanding 0.7% in seasonally-adjusted quarter-on-quarter terms, according to a preliminary release. The result, which surprised analysts on the upside, was an improvement from the prior quarter’s 0.5% decline, therefore averting a technical recession. Meanwhile, growth softened to 4.4% on an annual basis, down from the first quarter’s 6.2% increase.
The quarterly improvement was largely a result of the removal of Covid-19 restrictions imposed in January to contain the spread of the Omicron variant. Consequently, activity in the service industry, including hotels and restaurants, was able to recover. Positive developments were also recorded in most other industries, including public sector spending. Lastly, the employment indicator increased 0.7% in Q2, which should have provided some support to household spending against a backdrop of increasing interest rates and mounting price pressures.
A more comprehensive release will be published on 31 August.