Economic outlook, analysis and forecasts

Denmark - Economic forecast summary (June 2016)


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Economic growth is projected to rise to nearly 2% in 2017, driven mainly by domestic demand. Private consumption will be supported by growth in real incomes, related to higher employment and real wage gains, as well as by increasing property prices. Exports are projected to rebound somewhat after a very weak 2015.

Spare capacity in the economy is diminishing, and accordingly fiscal policy should gradually move towards a more neutral stance. Investment activity should benefit from the accommodative monetary policy stance, which is expected to remain through the peg to the euro. As real estate prices continue to rise, notably in the Copenhagen area, macro-prudential measures have been rightly stepped up in order to prevent the build-up of imbalances.

Subdued productivity growth continues to be a major long-term challenge. More reforms are crucial, particularly in areas such as domestic services and innovation. A number of reforms have been launched, but more can be done, for instance boosting competition in retailing and pharmacies; such reforms would reduce prices, favouring the less well-off particularly.

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