116
Denmark The economy is projected to grow at a moderate pace of around 1½ per cent in 2020 and 2021. Strong exports will slow and weigh on growth as demand from trading partners weaken. However, robust wage growth, continued job creation and negative interest rates will boost household disposable incomes and bolster private consumption. Inflation is set to rise gradually. Monetary policy conditions are expected to remain highly accommodative due to the krone’s peg to the euro. Strong public spending growth is planned in 2020, while public investment is set to pick up in 2021. A stronger focus on efficiency of public spending and investment would be suitable, not least in the government’s ambitious climate policy. The economy has been resilient Resilient exports have sustained economic growth in 2019. Pharmaceuticals and machinery, including wind turbines, account for a large part of export growth since the mid-2018. Specialisation in these industries has helped to cushion industrial production from the global trade slowdown. Private consumption continues to grow at a moderate pace, while business and residential investment growth have weakened. Business sentiment indicators have also been declining from a high level. Employment is still increasing, but job creation and the inflow of foreign workers have slowed. The easing of labour market conditions has stabilised wage growth at around 2.5%. Consumer price inflation has declined and is currently around 0.5%, bringing solid real wage gains for households.
Denmark Industrial production has resisted the global trade slowdown
Mortgage interest rates are very low, but credit growth remains moderate
Index 2015 = 100, s.a 125
Annual rate 5
Denmark
← Mortgage interest rate (new loans)²
Other Nordics¹
120
Y-o-y % changes 5 Household credit growth² →
4
Euro area
115
4
3
3
2
2
1
1
0
0
110 105 100 95 90
2015
2016
2017
2018
2019
0
-1
2010
2012
2014
2016
2018
-1
1. Other Nordics is a simple average of Finland, Norway and Sweden. 2. Effective mortgage rate of interest including administration rate and capital loss on issue of underlying bonds. Household credit includes all loans from banks and mortgage banks to the household sector. Source: OECD, Main Economic Indicators database; and Danmarks Nationalbank. StatLink 2 https://doi.org/10.1787/888934045259
OECD ECONOMIC OUTLOOK, VOLUME 2019 ISSUE 2: PRELIMINARY VERSION © OECD 2019