Denmark

Underpinned by consumption and external demand, Denmark's small open economy is likely to rebound by 3.0% in 2021 and average growth of 2.5% annually over 2022-2024. The wealthy and diversified economy, strong labor market, net external creditor position, and the use of 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 The comprehensive package of government emergency measures to shield businesses and employees from the temporary economic shock will push general government debt to beyond 40% of GDP in 2021 from 33.6% of GDP in 2019, but we expect it to gradually decline thereafter. Substantial

...Institutional and economic profile Flexibility and performance profile The Danish economy is recovering following the COVID-19 induced economic shock. + Underpinned by consumption and external demand, Denmark's small open economy is likely to rebound by 3.0% in 2021 and average growth of 2.5% annually over 2022-2024. + The wealthy and diversified economy, strong labor market, net external creditor position, and the use of 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. + The comprehensive package of government emergency measures to shield businesses and employees from the temporary economic shock will push...

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