Investment in Denmark

Denmark - Investment
GDP growth slows in Q4
Economic activity lost steam in the final quarter of 2020, with GDP growth clocking in at 0.6% in seasonally-adjusted quarter-on-quarter terms, slowing notably from Q3’s record expansion of 5.2%. On an annual basis, economic activity contracted at a more moderate pace than the initial estimate of 3.1%, recording a 2.6% drop in Q4 compared to the previous quarter’s 3.7% fall. Consequently, the overall decline of 3.3% for the year 2020 was also smaller than the initial projection of 3.7%.
The quarterly slowdown was brought about by renewed restrictions implemented to curb the spread of the second wave of the Covid-19 pandemic. Private spending grew at a softer pace in Q4 compared to the previous quarter (Q4: +1.2% s.a. qoq; Q3: +4.0% s.a. qoq), likely capped by partial business closures and a higher unemployment rate (Q4: 5.6%; Q3: 5.4%). Moreover, gross fixed capital investment also slowed from the prior quarter (Q4: +0.9% s.a. qoq; Q3: +3.5% s.a. qoq), although investment in machinery and civil engineering remained solid. More positively, government consumption surged in the quarter (Q4: +6.8% s.a. qoq; Q3: +0.1% s.a. qoq), supporting overall growth.
On the external front, exports of goods and services declined 0.6% in Q4, contrasting the 6.3% expansion recorded in Q3. Meanwhile, although imports of goods and services still grew, the pace of expansion slowed compared to the previous quarter (Q4: +1.8% s.a. qoq; Q3: +5.8% s.a. qoq).
After slowing at the tail end of 2020, economic activity is set to regain momentum in Q2 this year, once a larger portion of the population has been vaccinated and the economy gradually reopens. While improving conditions in key trading partners will be vital for robust growth in the external sector, consumers will play a key role in the recovery ahead.
Commenting on growth drivers for the recovery ahead, Elizabeth Mathiesen and Thomas Thygesen, economists at SEB, noted:
“The recovery has been put on hold, since restrictions have been extended. Led by consumers, growth will take off later this year due to a fast vaccine roll-out and easy credit conditions.”
FocusEconomics Consensus Forecast panelists see the economy expanding 2.9% in 2021, which is down 0.4 percentage points from the previous month’s forecast, and growing 3.1% in 2022.
Denmark - Investment Data
2015 | 2016 | 2017 | 2018 | 2019 | |
---|---|---|---|---|---|
Investment (annual variation in %) | 5.5 | 7.9 | 3.0 | 5.4 | 3.4 |
Denmark Facts
Value | Change | Date | |
---|---|---|---|
Bond Yield | -0.15 | -1.54 % | Jan 01 |
Exchange Rate | 6.66 | -0.57 % | Jan 01 |
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Economic News
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Denmark: GDP growth slows in Q4
February 26, 2021
Economic activity lost steam in the final quarter of 2020, with GDP growth clocking in at 0.6% in seasonally-adjusted quarter-on-quarter terms, slowing notably from Q3’s record expansion of 5.2%.
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Denmark: Business confidence drops in February
February 25, 2021
Business confidence among firms in the manufacturing sector continued to drop, with sentiment falling to a three-month low of minus 4 in February from January's minus 3.
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Denmark: Consumer confidence drops further into pessimism in February.
February 18, 2021
Consumer confidence fell to a three-month low in February, coming in at minus 5.2, down from January's minus 4.1.
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Denmark: Activity slows down in Q4; economy contracts at sharpest rate since 2009
February 15, 2021
Economic activity lost some momentum in the final quarter of 2020, according to a preliminary release, with GDP growth clocking in at 0.6% in seasonally-adjusted quarter-on-quarter terms, slowing from Q3’s record quarterly growth of 5.2%.
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Denmark: Inflation increases in January
February 10, 2021
Consumer prices rose a seasonally-adjusted 0.19% in January over the previous month, swinging from the 0.19% drop recorded in December.