Denmark

Capital: Copenhagen

Local time:
It is %T:%M %A in Copenhagen

GDP growth rate: 1.7% in 2013

FDI stock: 139 205 million USD in 2010

Economic trends

The country was strongly hit by the 2009 financial crisis, due to its high degree of openness to international trade and to the high level of financialization of its economy. The recovery has been only slight. Given the unfavorable international context, and the sharp decline in confidence observed since mid-2011, the Danish economy is expected to contract in 2012.

The government has planned a small fiscal stimulus in 2012, which associated with the cost of reforming the pension system will increase the budget deficit to nearly 6% of GDP. It is expected that in 2013 the deficit will be reduced through spending cuts, higher taxes (including "green" taxes) and reforming the labor market. To counter the pressure on the country's currency (krone), the central bank focuses on  interest rates. Other priorities include improving the quality and effectiveness of public services, increasing labor supply, promoting "green" technologies and maintaining the country's competitiveness in research and development. Faced with the depletion of its reserves of oil and gas, the country has also set ambitious goals for energy policy.

Denmark is a wealthy country, its per capita GDP figures among the highest in the world and its social inequalities are small. Although the unemployment rate remains low on European scale, it has clearly increased following the 2009 economic recession.

Main branches of industry

The agricultural sector only accounts for 1.3% of the GDP and employs merely 2.7% of the population. Nevertheless, Denmark has become one of the major exporters of agricultural products. Two-thirds of its agricultural production are exported. Most of the Danish land is used for agriculture and there are more than 50,000 farmers in Denmark. Nearly 90% of the country's agricultural revenue comes from livestock production.

Denmark has limited natural resources, a fact which slows down the development of its heavy industry. However, the country has enough oil and gas reserves to ensure its energy freedom. Denmark is the world's leading manufacturer of wind turbines and exports 85% of its production. The major activity sectors are: chemical, pharmaceutical and biotechnological industries.

The services sector contributes nearly three-fourths of the GDP and provides most employment.

International trade

Historically a nation of traders, Denmark's economy is extremely open to the outside. Trade represents nearly 100% of the GDP, exports and imports representing aroun 50% and 45% of the GDP respectively.

The trade balance is structurally positive, a tendency which was only strengthened by the combined effects of a decrease in imports linked to a lower domestic demand and the recovery of internation trade. In spite of a likely decrease in trade in 2012, this trend should continue.

Denmark's main trade partners are Germany, Sweden, the Netherlands, UK, USA and China.