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Danish economy a 'dud' due to export decline

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Danish economy a 'dud' due to export decline
Finance Minister Claus Hjort Frederiksen presents the economic report. Photo: Thomas Lekfeldt/Scanpix
13:45 CET+01:00
Economists from two of the country's largest financial institutions gave a harsh take on Denmark's 2015 economic performance, but the government declared its satisfaction with figures released at a press conference on Thursday.

A drop in export revenue has seen expectations for Denmark's economy growth drop since earlier this year, meaning that 2015 will be remembered as a “dud”, according to Tore Stramer, a senior analyst at Nykredit.

The drop in economic revenue has led to a revision in expectations for the growth of the economy this year, which was predicted at two percent in the spring. Banks Nykredit and Jyske Bank have now revised this figure down to 1.3 percent.

“The economy has stalled a little during the second and third quarters,” Jyske Bank's senior economist Niels Reinholt told broadcaster DR.

Analysts pointed to a decline in export, which grew at the start of the year but fell in the second half, as the main culprit behind the downturn. Allan Sørensen, a senior consultant with the Confederation of Danish Industry (Dansk Industri), told DR it was in particular a drop-off in exports to Europe that had seen the shrink, with exports to “only the USA” performing as expected.

Sørensen also pointed out a slowdown in the economies of “big growth countries” such as China, Russia and Brazil as having knock-on effects for the Danish economy.

Both Reinhholt and Stramer consider the government's prediction of a final growth figure of 1.4 percent for 2015 to be slightly optimistic, with both experts themselves predicting 1.3 percent.

Although the government's figure itself is a downwards revision from the 1.5 percent given in September, Finance Minister Claus Hjort Frederiksen declared himself satisfied with the year's growth as the government published its economic overview (Finansministeriets Økonomiske Redgørelse) on Thursday.

An increase in public expenses of 0.8 percent was given by the government as one of the reasons why growth was slightly lower than expected, with the costs of increased numbers of asylum seekers blamed as a major contributor to this.

However, Frederiksen said that the overall figures painted a promising picture, with 80,000 more people in employment and exports expected to increase from 2.1 percent to 4.3 percent in 2016.

The government maintained in the report that the economy would continue to expand, with a growth rate of 1.9 percent expected in 2016 followed by 2.0 percent growth in 2017.

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