Large countercyclical policy measures support the economy and its recovery prospects. Underpinned by consumption and external demand, Denmark's small open economy is likely to rebound by 2.5% in 2021 and average growth of 2.4% annually over 2022-2024. The wealthy and diversified economy, strong labor market, net external creditor position, and sizable fiscal space have prevented longer-lasting damage to the economy. We expect the minority government to uphold Denmark's policymaking track record, promoting balanced economic growth and sustainable public finances, despite the fragmented political landscape A strong budgetary position before the pandemic has enabled Denmark to contain the unprecedented economic shock, despite temporary deterioration in budgetary performance. A comprehensive package of government's emergency measures to shield businesses and employees from the
