Danish Economic GDP Indicator Disappoints as Growth Rate Falls

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Denmark’s economic growth rate slowed to 0.3% in the first three months of the year, according to a trend indicator from Statistics Denmark that disappointed economists.

Key Insights

• The service sector was a significant contributor to GDP growth, which rose 0.8% in the final quarter of 2018.
• The trend indicator is a first estimate and carries a margin of error of more than 0.5 percentage points. Economists have in the past highlighted that Danish GDP data is particularly unreliable.
• The International Monetary Fund on Monday highlighted Denmark’s “impressive” economic performance and high standards of living this week as it forecast an annual GDP growth rate of 1.7% in 2019. The IMF cited a sharper-than-expected slowdown among its main trading partners, a disorderly Brexit, high household debt and elevated house valuations as potential concerns.
• Robust growth and low unemployment have pushed the economy down the list of voters’ concerns ahead of a general election scheduled for June 5.

What Economists Say

• Las Olsen at Danske Bank said he had expected a higher number and that the best was probably behind for the Danish economy. There is a risk of “stagnation” or even a slowdown in the coming years.
• Bo Sandberg of the Danish construction association said the economy was resilient in the face of a slowdown among Denmark’s neighbors and the global uncertainty from Brexit and the trade war. “The Danish economy is boring in a good way.”

To contact the reporter on this story: Nick Rigillo in Copenhagen at nrigillo@bloomberg.net

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Christian Wienberg, Tasneem Hanfi Brögger

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