Denmark sees quicker economic recovery from COVID-19 impact

Denmark’s government on Monday raised its economic growth forecast for this year and trimmed it for 2022, as it expects the recovery from the impact of the COVID-19 pandemic to kick in sooner than expected.

Driven by a spike in private consumption at home, rising exports and low infection rates, the Danish finance ministry now expects gross domestic product (GDP) to grow by 3.8% this year, up from a May forecast of 2.4%.

“The Danish economy is currently running at high speed after the reopening of society following a wave of infections during the winter,” Finance Minister Nicolai Wammen said in a statement.

“Economic activity and employment now exceed the level before the outbreak of the coronavirus pandemic,” he said.

Next year the Danish economy is expected to grow by 2.8% versus a previous forecast of 3.6%, the ministry said.

It still expects a budget deficit of 0.5% of GDP this year but signalled a slightly tighter fiscal policy next year. The deficit is seen narrowing to 0.2% of GDP in 2022, slightly less than a previous forecast of 0.3%.