Country Economic Forecasts - Denmark

Country Economic Forecasts - Denmark

We expect the Danish economy to contract sharply in Q1 due to the extension of the national lockdown through February. The lockdown successfully reduced the number of cases and hospitalisations in January, but the threat of new coronavirus variants has forced the government to maintain restrictions, with the highly contagious UK variant rapidly becoming the dominant strain. The slow rollout of vaccinations within the EU will delay the easing of restrictions. In light of the extended lockdown, we have revised down our expected economic growth rate for 2021 to 0.6% from 1.9% previously. Activity should return to our previous baseline by H2 2021. Hard data for Q1 is not yet available, but initial survey evidence supports our expectation of a contraction in Q1 2021. The ESI declined in January, while the manufacturing PMI continued to contract in January. Retail sales recovered strongly in Q4 thanks to the disbursement of holiday pay, which will continue to boost consumption in Q1. But this likely reflects a partial shift in spending habits from services towards retail, with elevated savings still dragging on the recovery. We do think the economy is better placed to withstand the restrictions this time despite them being of a similar stringency to those imposed last spring. We still expect economic activity to recover strongly in H2 2021 as better weather and higher rates of inoculation help to control the pandemic, but the slow vaccine rollout will likely delay the relaxation of restrictions further into Q2, keeping activity depressed for longer. Even then, there are downside risks to the outlook as international travel restrictions will likely be the last to ease, making gains from this year’s tourism season uncertain.

​Denmark: The following represents a general Table of Contents outline for the Country Economic Forecast.
The actual report may cover any or all of the topics listed below.
Highlights and Key Issues
four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview
Forecast Table showing % changes for the country
with 2 years of historical data and 4 years of forecast data for the following:
Domestic demand
Private consumption
Fixed investment
Stockbuilding (% of GDP)
Government consumption
Exports of goods and services
Imports of goods and services
Consumer prices
Current account balance (US$ and % of GDP)
Government budget (% of GDP)
Short-term interest rates (%)
Long-term interest rates (%)
Exchange rate (vs. US dollar)
Exchange rate (vs. euro)
Economic Overview
two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts
Charts and Tables
covering a full range of economic developments relevant to the time period covered.
These could include such topics as:
Contributions to GDP growth
Monthly industrial output
Business and consumer confidence
Unemployment rate
Retail sales
Prices and earnings
Consumption and investment
Government balance and debt
GDP and industrial production
Monetary policy and bond yields
Background Information on the country
One or two pages of text covering the main historical political and economic factors that determine the country's current position
Key Facts on the country
Map of the country
Key political facts
Long-term economic and social development
changes since 1980
Structure of GDP by output
latest year
Long-term sovereign credit ratings and outlook
Corruption perceptions index- latest year
Structural economic indicators
changes since 1990
Destination of goods' exports -prior years
latest year
Composition of goods & services exports
latest year ​

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