Denmark's output growth is now expected to reach 0.75 percent this year, down sharply from a prediction of 1.4 percent made in August.
In 2015, it would be "almost 1.5 percent", also lower than an earlier estimate of 2.0 percent.
"The weaker growth in demand from abroad has contributed to weaker growth in Denmark and Danish companies and households have been more reluctant to invest and consume," the Ministry of Economic Affairs and the Interior said in a statement.
Consumption has slumped since Danes began paying down a heavy debt burden in the wake of a burst housing bubble, but the government said household finances were now becoming more "balanced".
Sydbank analyst Peter Bojsen Jakobsen said the new growth forecast was more "realistic" than before, but added that future revenue from North Sea oil was most likely overstated since it was based on an oil price of $85 per barrel, compared with a current price of around $64.
"Disregarding the government's view on the oil price, the forecast is in line with our view of the Danish economy," he said.