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Denmark Set to Exit Crisis Faster Than Feared in New Forecast
(Bloomberg) -- Denmark’s government now predicts the economy will expand by 1.2% in 2023, double the pace in its earlier forecast, as inflation slows and house prices rebound at a faster pace than previously anticipated.
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The economy ministry raised its gross domestic product growth forecast from 0.6% in May and from 0.2% in March. In 2024, GDP will grow 1.4% the ministry said on Thursday.
Denmark is experiencing “only a mild slowdown” compared to neighboring countries, Economy Minister Jakob Ellemann-Jensen said in a statement.
“The Danish economy has shown itself to be in particularly good shape,” he said. “Inflation has come down relatively quickly, and a large part of the adjustment in housing prices seems to have taken place.”
Earlier on Thursday, Statistics Denmark had published data showing the AAA economy grew 0.3% in the second quarter, higher than a preliminary reading two weeks prior, driven by the massive growth among pharmaceutical companies including Novo Nordisk A/S.
Read More: Novo Nordisk’s Growth Camouflages Weak Spots in Danish Economy
Denmark’s inflation rate is expected at 3.8% this year, lower than the government’s May estimate of 4.3%. In 2024, the rate will fall to 3%.
Meanwhile, house price declines will be limited to 4.5% in 2023, from 9.2% estimated previously, and will increase by 1.4% in 2024, the ministry said.
The government also presented its budget proposal for 2024, which it said will have a neutral impact on the economy. It said it had prioritized spending on health care, education and the green transition. Late Wednesday, the government also said it expects a lower financing need next year.
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