Denmark’s economy is in moderate recession, its central bank said on Wednesday, and it forecast a 3.6% contraction of the economy this year, an improved outlook compared with earlier estimates.
“Despite the rapid recovery, the economy is not back at the pre-coronavirus level, and the Danish economy is currently in a moderate recession,” the central bank said in a statement.
The outlook has improved compared with a June estimate by the central bank of a 4.1% contraction.
The economy will recover over the next two years, however, a recovery driven by domestic consumption as it returns to pre-coronavirus levels, the central bank said.
The bank now expects GDP to grow 3.6% in 2021 and 2.3% in 2022.
“The planned fiscal policy in the bill for next year’s Finance Act is well aligned with the projected development. But we should be ready to both speed up and apply the brakes,” central bank governor Lars Rohde said in a statement.