Strong Danish economy
The Danish economy is entering an economic boom phase. More persons than ever before are in employment, the workforce has set record, and prosperity has never been higher. However, firms also report a shortage of labour, and employment growth will increase labour market pressures in the coming years. This is apparent from the government’s new forecast for the Danish economy, Economic Survey, May 2018.
The rate of growth in GDP has gradually increased to around 2 per cent in recent years and is thus the highest for more than a decade. Growth is driven by both strong private domestic demand and a solid contribution from exports.
The preconditions for further expansion are good, among other things due to reforms, which also in the coming years will expand the workforce. Increasing pressure on the productive capacity of firms and more widespread labour shortages are, however, expected to limit the potential for growth, so that growth gradually is expected to abate.
The rate of growth in GDP is estimated to be 1.9 per cent in 2018 and 1.7 per cent in 2019. Growth is expected to increase employment by almost 70,000 persons during the course of 2018 and 2019.
Minister for economic affairs and the interior Simon Emil Ammitzbøll-Bille says:
There are good reasons to be content with the strong Danish economy. Employment is at the highest level ever, and never before have so many been part of the labour market. The good development in the Danish economy has not come by itself. Reforms have played a major role. It is my clear ambition that we should continue along that track. It is not a solution to turn a deaf ear to firms that report a shortage of labour. We should use the good times to trim the Danish economy.
The expansion in the Danish economy is driven by private consumption, private investments and exports. Economic policy is planned to dampen capacity pressures and increase the possibility of a prolonged boom. The dampening effect of finance and structural policy reflects, among other things that structural reforms in recent years have extended the supply of labour, thereby reducing labour market pressures.
Minister for finance Kristian Jensen says:
Growth is solid, and we expect a continued balanced expansion in the Danish economy. We have well-managed finances, and fiscal and structural policies support the good development. Growth of almost 2 per cent a year is good, but there are things Denmark can do even better. We must exploit the good opportunities to increase employment for both immigrants and others who are outside the labour market, we need to strengthen business conditions and reward all those who work hard with more core welfare and tax cuts.
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