Denmark’s economy grows but public still feels the pinch
An early indicator suggests that Denmark’s economy grew in the second quarter of this year after a downward turn in the first three months of 2022.
A GDP indicator from national agency Statistics Denmark suggest the economy grew in Q2 of 2022.
After decreasing 0.5 percent in the first quarter of the year, the initial indicator for the second quarter gives a 0.7 percent growth according to the agency.
A decrease in GDP in two consecutive quarters fulfils the technical definition of a recession. This has therefore been averted by the Danish economy in the first half of 2022.
Analysts commented that the second-quarter was larger than had been predicted.
“The growth comes after a first quarter in which things went in the opposite direction, so in the bigger picture it’s more standing still than high growth that is characterising the Danish economy,” Danske Bank senior economist Las Olsen told news wire Ritzau.
Despite the positive development, Danish businesses and the economy in general are still facing challenges on a number of fronts, he also said.
“This must be seen in light of the massive problems many businesses have with acquiring materials and labour, even though it appears that employment is actually still increasing,” he said.
“Businesses could well have sold more, but it’s difficult for them to make [products],” he said.
READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage
Although the economy has grown statistically, many will not have felt this materially, the analyst said. This is because prices have continued to increase and inflation remains high, meaning consumers are still getting less for their money.
Retail activity has fallen because of the high prices, senior economist with Arbejdernes Landsbank, Jeppe Juul Borre, noted with regard to the Statistics Denmark figures.
“Danes are currently experiencing the steepest increases in consumer prices for almost 40 years. That takes purchasing power away from consumers and squeezes private spending,” he wrote in a comment.
“Private spending comprises almost half of the Danish economy and therefore plays a huge role for the economy,” he said.
The hotel and restaurant industries are primarily responsible for the second-quarter growth, according to Statistics Denmark.
The GDP figure is an early indicator, meaning it can be revised once more data is available.
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A GDP indicator from national agency Statistics Denmark suggest the economy grew in Q2 of 2022.
After decreasing 0.5 percent in the first quarter of the year, the initial indicator for the second quarter gives a 0.7 percent growth according to the agency.
A decrease in GDP in two consecutive quarters fulfils the technical definition of a recession. This has therefore been averted by the Danish economy in the first half of 2022.
Analysts commented that the second-quarter was larger than had been predicted.
“The growth comes after a first quarter in which things went in the opposite direction, so in the bigger picture it’s more standing still than high growth that is characterising the Danish economy,” Danske Bank senior economist Las Olsen told news wire Ritzau.
Despite the positive development, Danish businesses and the economy in general are still facing challenges on a number of fronts, he also said.
“This must be seen in light of the massive problems many businesses have with acquiring materials and labour, even though it appears that employment is actually still increasing,” he said.
“Businesses could well have sold more, but it’s difficult for them to make [products],” he said.
READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage
Although the economy has grown statistically, many will not have felt this materially, the analyst said. This is because prices have continued to increase and inflation remains high, meaning consumers are still getting less for their money.
Retail activity has fallen because of the high prices, senior economist with Arbejdernes Landsbank, Jeppe Juul Borre, noted with regard to the Statistics Denmark figures.
“Danes are currently experiencing the steepest increases in consumer prices for almost 40 years. That takes purchasing power away from consumers and squeezes private spending,” he wrote in a comment.
“Private spending comprises almost half of the Danish economy and therefore plays a huge role for the economy,” he said.
The hotel and restaurant industries are primarily responsible for the second-quarter growth, according to Statistics Denmark.
The GDP figure is an early indicator, meaning it can be revised once more data is available.
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