Nationalbanken figures show that the Denmark’s state debt of 438 billion kroner in November 2021 is 17.8 of the national GDP, which is the lowest level since 2009.
GDP, a metric for the strength of the economy, is a measure of the value of the country’s economic output in a given year.
The Danish Chamber of Commerce said it was “amazing” that national debt was at its lowest share of GDP for 13 years in the face of the Covid-19 crisis and compensation packages for businesses which were introduced in response to it.
“If we rewind to December 2020, the Ministry of Finance said it expected the national debt to end up as high as 27 percent of GDP in 2021,” the organisation’s senior economist Tore Stramer said.
“That means that the national debt in 2021 increased by around 200 billion kroner less than feared,” Stramer said.
The surprising result is connected to the strong response of the Danish economy to the coronavirus crisis last year, according to the economist.
That response has seen record levels of employment with several sectors experiencing labour shortages.
“In addition to that, there is a particularly strong growth in spending that has lifted activity in the Danish economy,” Stramer said.
“That has really lifted state revenues from personal taxes, business taxes and VAT,” Stramer said.