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SWEDEN

‘Danes are richer than Swedes and Germans’

Denmark's record levels of personal debt are well-known, but a new analysis shows that average net worth is increasing while debt levels stabalise. That puts the nation in a better position than its neighbours, the national mortgage banks association argues.

'Danes are richer than Swedes and Germans'
Most Danish personal net worth is in their property. Photo: Colourbox
Danish households have the highest level of personal debt in the world, according to OECD figures. But a new analysis from the Association of Danish Mortgage Banks (Realkreditrådet) shows that a typical Dane’s net worth far exceeds their debt.
 
The analysis states that a typical Danish household has a net worth of 2.4 million kroner ($438,000), which according to the association is three times as high as the average personal debt. 
 
“There is a lot of talk about Danes’ debt, but their assets are much bigger,” Peter Jayaswal, the deputy director of the mortgage bank association, told Ritzau news agency. “Numerous analyses from the National Bank and the business ministry show that Danes have large net worths and a robust personal economy.”
 
According to the OECD, Danish households have debt equal to 321 percent of their disposable incomes, the highest ratio in the world. But Jayaswal said that despite that, Danes are actually much better off financially than their neighbours. 
 
“Seen internationally, Danes are also very wealthy and we are richer than both the Swedes and the Germans,” he said. 
 
Danes’ property assets account for the largest part of their overall net worth. Around 41 percent of the cumulative national wealth is in bricks and mortar. 
 
The analysis also shows that the average net worth rose by 90,000 kroner ($16,420) in 2013. 
 
“Danes’ debt, on the other hand, for the most part did not increase,” Jayaswal said. 

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DEBT

Danish national debt reaches highest level since 2013

Denmark’s national debt has piled up during the coronavirus crisis, due in part to spending on compensation for shuttered businesses and wages for furloughed workers.

Danish national debt reaches highest level since 2013
File photo: Kristian Djurhuus/Ritzau Scanpix

The country’s debt measured in kroner is now at its highest for 20 years. As a proportion of the national GDP, it is at an eight-year peak.

At the beginning of 2021, the national debt reached 536 billion kroner, an increase of 115 billion kroner compared to the beginning of 2019.

That is evidence that the country has been hard-hit by the economic ramifications of the coronavirus, but government spending during the pandemic had been a necessary decision, an expert said.

“It has been necessary to avoid a massive economic downturn, a huge amount of unemployment and bankruptcies,” said Tore Stramer, senior economist with the Danish Chamber of Commerce.

A wage compensation scheme was initially introduced last spring as lockdown measures took effect during the first wave of the coronavirus pandemic, and subsequent measures have sought to assist businesses and individuals impacted by lockdowns and restrictions.

READ ALSO: Denmark to offer further compensation for corona-hit businesses

Current compensation rules enable businesses closed due to the lockdown to send staff home with 75-90 percent of their wages paid by the state, up to a limit of 30,000 kroner per month.

The state debt is lower than a prognosis issued by the finance ministry in December, meanwhile. According to the forecast, Denmark’s debt would have been 87 billion kroner higher than the current amount of 536 billion kroner.

Stramer said there was no cause for undue concern over the current national debt.

“It is clear that an increase of 115 billion kroner sounds like a lot. But it’s certain not something that can’t be managed overall,” he said.

“Interest is very low and there is also an expectation of recovery during the spring,” he added.

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