“The second quarter of 2020 is set to become one of the blackest chapters in Danish economic history,” Nicolai Wammen said at a press conference held on Thursday morning.
Even after the rapid action taken by the government to shore up businesses impacted by the heavy restrictions brought in to control the spread of coronavirus, unemployment has still shot up by 44,785, while 73,220 have been sent home without salary.
Wammen warned that the real impact of the pandemic was still to come. Even if the country begins now to reopen its economy relatively rapidly over the coming months, the finance ministry still estimates that public finances to plummet from a healthy 5 percent surplus to a 2 percent deficit, while GDP will fall by 3 percent.
If the crisis is more long-drawn-out, the deficit could be as much as seven percent, while GDP could fall by as much as 6 percent. A middle scenario of 'gradual reopening', meanwhile, would see a 4.5 percent drop in GDP and a 6 percent deficit.
“We don't know yet whether it will be scenario one, two or three,” Wammen said. “The developments are so powerful that we do not know if the assessments will be outdated in just a few months.”
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Denmark's government has already pushed through over 270bn kroner ($40b)n worth of in emergency financial measures to help the economy cope with the lockdown enforced to stem the spread of the virus.
On Thursday, Wammen said that an extra 35 billion kroner ($5 billion) would be made available to small and mid-sized businesses.