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GDP is projected to grow at close to 2% in 2018 and 2019, supported by accelerating private consumption and an improved external environment. While rising labour force participation will partly help to meet growing labour demand, wage and price inflation are expected to rise as labour shortages increase. A decreasing trade balance will slowly reduce the considerable current account surplus.
The fiscal policy stance is expected to support growth. A tighter fiscal stance would be prudent, given continued very accommodative monetary policy conditions and intensifying supply-side constraints. The buoyant economic conditions and solid housing market present a welcome opportunity to further shift the tax structure from labour towards immovable capital and ease rent regulation to reduce the price pressure on owner-occupied dwellings.
Economic Survey of Denmark (survey page)