Denmark Posts Biggest GDP Drop Since Financial Crisis Amid Virus

(Bloomberg) --

Denmark’s economy contracted the most since the financial crisis in the first quarter and unemployment surged in April, according to data that helps paint a true picture of the cost of the country’s early Covid-19 lockdown.

The economy shrank 2.1% from the last three months of 2019 and 0.3% on an annual basis, according to preliminary data that was worse than suggested by the GDP indicator. The drop was nevertheless more contained than in the euro area.

Separate data showed the seasonally-adjusted unemployment rate jumping to 5.1% in April, from 3.6% in March. The gross rate rose to 5.4%.

Denmark was one of the first European countries to shut down much of its economy, back in mid-March, and is now one of the first to re-open.

Despite support measures worth more than 400 billion kroner ($60 billion), the government is forecasting a contraction in gross domestic product of 5.3% this year.

“We have not seen unemployment peak yet,´´ said Danske Bank Chief Economist Las Olsen. Still, there are signs that the economy had already started its recovery in May, he added.

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