GDP has grown by around 1.7 per cent during the last three years. Growth in the Danish economy has continued this year, and GDP is expected to grow by 2 per cent in 2017 and 1.8 per cent in 2018.
Minister for economic affairs and the interior Simon Emil Ammitzbøll says:
“The Danish economy is in a new phase. Unemployment is low, and employment is growing at a rapid pace. I’m very pleased that so many more have joined the labour market. But it also means that economic pressure is increasing. My ambition is to hold on to the good development, and to that end there is a need for political initiatives to support sustainable growth. The government's budget bill, the tax proposal and new business and entrepreneurial initiatives should be seen in this light.”
- Simon Emil Ammitzbøll
The positive development in the Danish economy is particularly evident on the labour market. Since 2013, employment has increased by 150,000 persons. Employment growth is expected to continue, so total employment at the end of the forecast period is expected to reach just below 3 million persons. Employment will thus be close to its highest level ever.
The increase in employment is supported by a historically large increase in the labour force. The size of current labour force is assessed to be at its highest level ever.
In the Economic Survey, the significance of globalization for the Danish economy is investigated. The analysis shows that the Danish economy has obtained large economic gains as a result of globalization. Gains from higher trade intensity with other countries since the mid-1980s have by themselves increased GDP by 165 billion by 2016. This corresponds to DKK 29,000 per Danish citizen.
Minister for economic affairs and the interior Simon Emil Ammitzbøll says:
“Looking ahead, the big risk is less globalization – not more globalization. If we do not continue to seize the opportunities in the global economy, we are going to lose opportunities for even higher wealth. Denmark is already well on its way, but we can be even better at harvesting the benefits from globalization. This can, for example, be through better conditions for investment, and by supporting companies’ access to foreign labour.”
- Simon Emil Ammitzbøll
|
Facts: Main points from the Economic Survey, August 2017
- The positive growth in the Danish economy has continued in 2017. GDP has grown at a rapid pace with quarterly growth rates of up to ¾ per cent every quarter since the beginning of 2016. It is projected that the rate of GDP growth in 2017 will be the highest since 2006.
- Growth is expected to decrease slightly in 2018, which should be seen in conjunction with slightly weaker growth abroad, subdued growth in public demand, and increasing pressure on available production resources.
- GDP is expected to grow by 2 per cent this year and by 1.8 per cent next year. Compared to the assessment in May, this is an upward adjustment of the expected growth rate in 2017 by 0.3 percentage points and by 0.1 percentage points in 2018.
- Since 2013, employment has increased by around 150,000 persons, and last year almost 50,000 more persons got a job. Employment growth is expected to continue so that total employment at the end of the forecast period is expected to reach just below 3 million persons and thus be close to its highest level ever.
- The increase in employment is driven by a historically large increase in the labour force, which is estimated to have reached the highest level ever. The inflow to the labour force reflects, among other things, reforms, which also in the coming years will contribute to sustainable employment growth.
- Foreign labour has also contributed significantly to a larger labour force. Over the past four and a half years, the number of foreign workers in the Danish labour market has increased by about 65,000 persons, resulting in about 240,000 foreign employees in Denmark. The inflow of foreign labour corresponds to more than 40 per cent of the total increase in employment since 2013.
- The recent years' upturn means that the Danish economy now is in a new business cycle phase. On parts of the labour market there is evidence of increasing capacity pressure. This is especially true in construction, where companies increasingly are reporting that lack of labour is a constraint on production. Lack of labour may slow down the upturn in the Danish economy.
- In the current situation with high employment, it is appropriate that fiscal policy limits the risk of overheating. The government is, among other things, planning a subdued growth in public consumption in the coming years, which in itself will dampen the capacity pressure. Overall, the planned consolidation of fiscal policy in the coming years, together with a continuous reform agenda, will help maintain and extend a continued balanced upturn in the economy.
|
Further information
Head of Division Lone Ank, lonak@oim.dk, phone +45 25 43 98 61
Head of Press and Communications Sigga Nolsøe, sno@oim.dk, phone +45 22 26 95 07