...A case in point is private consumption, which should be firing on all cylinders. ...The --------- global crisis and then the --------- eurozone shock have impaired confidence and demand, and this will not easily be recovered in the next few years. A modest upturn in external demand (mainly from the eurozone) will help cushion the blow, but the long-term trend in Danish real output and investment has fallen significantly since ----, and we believe that post-crisis growth will remain around -.- , versus the -.- enjoyed pre-crisis. Regarding investment, we forecast that fixed capital forma- tion will not return to the ---- peak in real terms until ----. ...As such, we believe that real GDP growth will be subdued for several years.
...With the effect from the extraordinary measures by the cen- tral bank likely to begin waning in ----, we forecast private consumption to slow down in, and we forecast an average growth rate of -.- in ---------. The high level of house- hold indebtedness will remain a major structural drag on spending, as the household debt burden is the highest among OECD states � at --- of gross domestic income as of ----. ...Over the coming decade, Denmark s fiscal buffers and sover- eign risk profile remain solid, which should support spending, reflected in our forecast for government spending to contribute -.-pp to growth over this time horizon. Gross Fixed Capital Formation: Although investment is likely to remain weak relative to historic performance, improving demand conditions from the eurozone and low borrowing costs bode well for a continued expansion in fixed investment in the coming years. We forecast fixed investment to add -.-pps to headline growth over the coming decade. Net Exports: External demand conditions are improving after years of malaise. Seven out of Denmark s top -- export markets are eurozone member states, and the eurozone macro outlook will continue to benefit from the European Central Bank s quantitative easing programme, boding well for Danish exports.
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