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Denmark ‘finds’ extra 52 billion kroner in state funds

The Danish state raised 128.7 billion kroner in 2022, some 52.4 billion kroner more than the country’s finance ministry expected in calculations made last summer.

Published: 5 January 2023 17:23 CET

Denmark 'finds' extra 52 billion kroner in state funds

Denmark's national finances are in a better position than they were expected to be at the end of 2022. Photo: Kristian Djurhuus/Ritzau Scanpix

New data reported by news wire Ritzau shows that Denmark’s state coffers are over 52 billion kroner healthier than the Ministry of Finance said in August they expected by the end of 2022.

The 2022 result is a huge win for public finances and shows that the country’s economy is faring better than previously thought, senior economist Las Olsen of Danske Bank said.

“2022 was a high with high growth after corona. That tells us more than anything something about why public finances are so strong,” he said.

Another explanation for the figure is the boost given to tax revenues by high growth, he said.

A similar situation occurred in 2021, Ritzau writes. A year ago, an “extra” 33.3 billion kroner was present in state finances in comparison to government expectations.

“We have seen time and again that public finances have been markedly better than expected and that is characterised by many things but not least that revenues keep on positively surprising us,” he said.

READ ALSO: Denmark reduces national debt by 25 percent since 2021

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’Record number’ of foreigners move to Denmark for work

A total of 31,600 people moved to Denmark to work last yer, according to a Statistics Denmark review released on Tuesday.

The figure corresponds to a 24 percent increase compared to 2021 and is the highest in the history of the statistic, which goes back to 1997.

The average number of work immigrants in the decade prior to 2022 was 21,000 people.

Specifically, the number describes the amount of people who were given work permits in Denmark in a given year.

The fact that the statistic has reached a historical high is remarkable, according to an economist.

“In a time with a major labour shortage, Danish businesses have succeeded in recruiting labour from abroad. That is a big success story, which certainly ensures growth and stability in the Danish economy in the period after the coronavirus pandemic,” senior economist Tore Stramer of the Danish Chamber of Commerce told news wire Ritzau.

“The large inflow of foreign labour has held of a threatening overheating of the labour market and ensured stable high growth in the economy,” he said.

READ ALSO: Danish parliament set to vote through relaxed work permit rules

Broken down by nationality, the largest proportion of people moving to Denmark to work came from EU countries in Eastern Europe.

Some 6,000 Romanian nationals were granted Danish work permits in 2022, with 3,700 coming from Poland.

Employment levels in Denmark continue to set records, confounding an uncertain economic outlook and high inflation.

READ ALSO: Danish economy defies headwinds to grow by 3.6 percent

Foreign labour is a driving factor for high employment levels, Stramer said.

“The large inflow of foreign labour has been the absolute primary factor behind the strong rise in employment in recent years,” he said.

“Specifically, foreign labour has driven around 40 percent of the overall increase in employment over the last three years,” he said.

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